Analysts at Kotak Institutional Equities noted that Vodafone Idea remains in a tricky situation even as the court verdict offers short-term cash flow relief.
Vodafone Idea share price rallied 10 per cent to Rs 13.21 apiece on BSE after the telecom major approved a fund-raising plan worth Rs 25,000 crore through share sale and debt. The telecom company also informed investors that it will be making a strategic announcement today. Post board meeting last week, Vodafone Idea informed that its board has approved raising Rs 15,000 crore through issue of equity shares or securities convertible into equity shares, global depository receipts, American depository receipts, foreign currency convertible bonds, convertible debentures, warrants, composite issue of non-convertible debentures and warrants or a combination thereof by way of a public issue, preferential allotment, private placement, qualified institutions placement or through any other permissible mode in one or more tranches. In the previous session, the stock climbed up to scale a fresh 52-week high of Rs 13.45 apiece.
At around 11 AM, Vodafone Idea shares were trading 6.83 per cent higher at Rs 12.83 apiece, as compared to a 0.28 per cent fall in BSE Sensex. Last week, the stock gained on the reports of investment from Amazon and Verizon. But later on, Vodafone Idea clarified saying that currently there is no such proposal being considered at the board. “As part of corporate strategy, the company constantly evaluates various opportunities for enhancing the stakeholders’ value,” it said in an exchange filing. The company’s board also approved the issuance of unsecured and/or secured, non-convertible debentures up to an aggregate amount of Rs 15,000 crore, by way of public offering or private placement basis or otherwise, in one or more tranches.
Analysts at Kotak Institutional Equities noted that Vodafone Idea remains in a tricky situation even as the court verdict offers short-term cash flow relief. According to the brokerage, the company needs a combination of quick, sharp improvement in pricing, flawless delivery on the fresh opex cut targets, competitive network spends to stem the trend of market share erosion and some equity infusion. “Equity infusion, we believe, will demand confidence in the other three, especially pricing visibility,” it said.
In a separate development, Vodafone Idea has informed that the company’s 25th Annual General Meeting (AGM) will be held on September 30, 2020, through video conference / other audio-visual means (OAVM).