We finally know why the Vodafone Idea stock rallied over 50% in the last one month
Vodafone Ideastock has seen a massive uptrend over the last one month.
- According to a new report, Vodafone Idea could finally be ready to raise equity, either from the promoters or private equity firms or both.
- The market seems to have caught a whiff of it, sending the stock rallying by over 50% in the last one month.
AdvertisementShares of Vodafone Idea have rallied by over 50% in the last one month, bringing back cheer to the shareholders of the company who have shown their faith while the telco was running on fumes over the past one year.
In early trade on December 16, Vodafone Idea’s shares were up by nearly 3% when compared to the previous closing price.
The rally seems exceptional, especially in the absence of any major positive for the company – Vodafone Idea’s subscriber attrition hasn’t slowed down, and its average revenue per user (ARPU) is significantly lower than that of its rivals, at just ₹109 versus Airtel and Reliance Jio’s ₹153 and ₹143, respectively.
So, what gives? Reportedly, the promoters of the company are aiming to increase the annual capital expenditure by four-fold to $2 billion (approx. ₹15,200 crore).
Clearly, the market caught a whiff of it.
It’s not the first time that reports have claimed Vodafone Idea will infuse equity, but this time, it’s coming straight from the horse’s mouth – the report adds that these comments were made by the company’s senior management at an internal investors’ call this week.
The increase in capex could help the telco catch up to its rivals Airtel and Reliance Jio in terms of technology and other aspects.
Business Insider has reached out to Vodafone Idea for comments.
For instance, Vodafone Idea did not launch Voice over Wi-Fi (VoWiFi) for several months after Airtel and Reliance Jio announced support across the country.
Vodafone Idea currently spends an estimated $500 million (approx. ₹3,800 crore) in capex, while its rivals Airtel and Reliance Jio spend $3 billion (approx. ₹22,800 crore) each.
At the end of September, 2021, Vodafone Idea had ₹250 crore in cash and cash equivalents, while its debt stood at ₹1.94 lakh crore. A four-fold boost is only possible if either the promoters, or private equity firms are ready to plough in equity into the third largest telecom company in India.
At ₹1, Reliance Jio’s latest data pack is the cheapest in the world – costs less than a packet of water
Here is why Facebook chief Mark Zuckerberg is praising India's techies as he dreams of a Metaverse future
TRAI’s push to make mobile banking services via USSD free faces stiff opposition from Airtel, Vodafone Idea
Popular on BI
- Which countries are most affected by severe seismic activity? New earthquake metric provides fresh perspective
- Exicom Tele-Systems to raise ₹429 cr via IPO; sets price band at ₹135-142/share
- Kawasaki Ninja 500 sports bike launched in India at ₹5.24 lakh
- Vodafone Idea board to meet on Feb 27 to consider fundraising proposal
- Stocks rebound: Sensex jumps over 500 points, Nifty hits fresh high