Vodafone Idea Shares Up 19% As Govt Stake Zooms, Buy Shares?

Vodafone Idea share price witnessed sharp gain of 19.38% at the time of writing the story on Bombay Stock Exchange (BSE) to Rs 8.13 per share as BSE Sensex recorded steep fall of 1360.91 points or 1.76% to 76,054.01. The stock also hit 4^th upper circuit in trade today on BSE. Earlier, the stock opened at Rs 7.49 per share, hit day’s high of Rs 8.57 per share, and day’s low of Rs 7.49 per share in trade today on BSE.

The rally was triggered after VI announced that Central government would convert its outstanding spectrum dues into equity shares worth Rs 36,950 crore. The company said it would issue 3,695 crore equity shares at Rs 10 per share which that will subsequently convert the dues to stock to the tune of Rs 36,950 crore.

After the move, shareholding of government of India in VI will zoom from existing 22.6% to 48.99%. Meanwhile, “promotes will continue to have operation control if the company, according to the BSE filing of the firm. The latest move will play a key role in bringing down VI’s financial obligations.

Earlier, VI issued a BSE filing informing about the decision on March 30, 2025. According to the regulatory filing dated March 30, 2025, “The total amount to be converted into equity shares is Rs. 36,950 Crore. The Company has been directed to issue 3,695 Crore equity shares of the face value of Rs. 10/- each at an issue price of Rs. 10/- each within a period of 30 days after issuance of necessary order from relevant authorities including from Securities and Exchange Board of India.”

The pricing of shares to be allotted has been arrived basis the higher of the volume weighted price of equity shares during last 90 trading days preceding the Relevant Date or 10 days preceding the Relevant Date (the Relevant Date being 26 February 2025), subject to provision of section 53 of the Companies Act, 2013 (i.e. shares cannot be issued at less than the par value). Post the aforesaid issuance of equity shares, the Government of India shareholding in the Company will increase from existing 22.60% to approx. 48.99%. The promoters will continue to have operational control of the company, added the exchange filing.

Vodafone Idea Shares Performance

The 52-week high of Idea share price on BSE stood at Rs 19.15 per share (as 28/06/2024) and 52-week low price is Rs 6.60 per share (as on 22/11/2024), respectively. The company has a market cap of Rs 57,685.57 crore. Meanwhile, its return on equity (ROE) stood at 29.33%.

Vodafone Idea share price gained 12.85% in last 1-week, rose 13.80% in last 2-weeks, and slipped sharply by 42.37% in last 1-year. In last 2-years, the stock surged 38.83% and declined 20% in last 3-years. It offered highest returns of 165.79% in last 5-years when Sensex zoomed 169.09%.

Vodafone Idea Financials Compared With Peers

The company announced its profit after tax or PAT at -Rs 6,492.60 crore. In comparison, Bharti Airtel declared its PAT at Rs 9,197.40 crore, Tata Com declared PAT at Rs 131.73 crore, and BHARTIHEXA’s PAT was reported at Rs 260.90 crore.

Should You Buy Vodafone Idea Shares?

Leading global brokerage firm Citi Research has maintained buy call on Vodafone Idea shares with target price of Rs 12 per share. The analyst stated that the immediate financial burden on VI may have come down, but it is likely to face issues in raising fresh funds to expand its 4G and 5G networks.

Motilal Oswal had also recommended buy call with upgraded target price of Rs 6.5 per share from previous Rs 5. The analyst said, “GoI equity conversion provides cash flow relief for Vi and is a key medium-term positive development, but stabilization of its subscriber base, long-pending debt raise, and further relief on AGR dues remain vital for Vi’s long-term survival.”

Disclaimer: The stock has been picked from the brokerage report of Citi and Motilal Oswal. Moneydaily.in, the author, and the respective brokerage house will not be held accountable for any losses caused as a result of decisions based on the article. Moneydaily.in advises readers to do their own research or consult a SEBI registered investment advisor before making any investment decisions.