Vodafone Idea share price zooms 10% on Rs 1,000 crore AGR dues payment ahead of SC hearing

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Published: July 20, 2020 11:49 AM

Vodafone Idea has paid a total of Rs 7,854 crore to DoT towards the AGR dues, against its total AGR dues of around Rs 58,000 crore

Vodafone Idea, vodafone idea share price, VILThe key upside risks to Goldman Sachs’ rating and target price include improving tariff environment, further capital infusion, government intervention M&A

Vodafone Idea share price zoomed nearly 10 per cent to Rs 9.69 apiece on BSE today after the telecom company paid Rs 1,000 crore towards the pending AGR dues. Despite a 10% gain in the stock price, Vodafone Idea stock price is still 23 per cent off from its 52-week high level. Vodafone Idea stock price hit a 52-week high of Rs 12.62 apiece last month. The Supreme Court is expected to hear the Adjusted Gross Revenue (AGR) case later today. “Vodafone Idea (VIL) stands at the last spot in both active and gross subscriber market share. VIL’s continuous loss of subscribers is majorly due to its sub-par network qualities along with its survival uncertainty, which is hinging on the Supreme Court’s decision to grant an extended moratorium period on the AGR liability,” Motilal Oswal Financial Services said in a report.

Foreign brokerage firm Goldman Sachs has given a ‘neutral’ rating to the Vodafone Idea stock, with a 12 months price target of Rs 4.40 apiece. The key upside risks to its rating and target price include improving tariff environment, further capital infusion, government intervention M&A. While for the key downside risks, it includes delay in tariff hikes, spectrum auctions and regulatory hurdles. Including the payment of Rs 6,854 crore in last three tranches and Rs 1,000 crore on Saturday, Vodafone Idea has paid a total of Rs 7,854 crore to DoT towards the AGR dues, against its total AGR dues of around Rs 58,000 crore. On the other hand, as per the DoT, out of Bharti Airtel’s nearly Rs 43,000 crore total dues, the company has paid nearly Rs 18,000 crore.

Research and brokerage firm Bernstein has rated Vodafone Idea stock as ‘underperform’ with a target price of Rs 2.50. “For Vodafone Idea, the key upside risks to our price target is that the Indian government provides relief to the company in terms of AGR dues/payment terms, or Reliance Jio’s impact on competitive dynamics diminishes sooner than expected,” Bernstein said in a report.

On the back of nationwide lockdown to curb the fast-spreading coronavirus pandemic, Vodafone Idea lost 64 lakh subscribers in March. Besides, last week the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had stayed the Telecom Regulatory Authority of India’s (TRAI) order to the telecom company to put on hold its premium plan RedX.

Around 11.30 AM, Vodafone Idea shares were trading at Rs 9.46 apiece, up 6.53 per cent. In comparison, S&P BSE Sensex was trading 0.61 per cent higher at 37,246.

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