The shares of Vodafone Idea (Vi) jumped nearly 7.5 percent to day's high on August 25, extending significant gains for the second consecutive session after a report by Mint said that the Prime Minister's Office (PMO) is set to take a call on a relief proposal for the telecom major.
The shares of the company gained 16 percent in the two consecutive trading sessions to hit an intraday high of Rs 7.60 apiece on Monday. The stock later pared some gains to close at Rs 7.40 apiece, marking a rise of nearly 5 percent from the previous closing price.
PMO had received an informal note from the Department of Telecommunication (DoT), proposing multiple relief options for the debt-ridden telecom company, Mint reported last week citing people familiar with the matter. These options include another two-year pause on paying the statutory dues under moratorium currently. The PMO will take the decision on whether these relief measures are to be extended, said the Mint report cited a source as saying.
DoT has also proposed to give Vodafone Idea more time to repay dues, smaller annual payouts, and a waiver on penalties and interest penalties on AGR payment, the report added.
Moneycontrol couldn't independently verify the report.
Vodafone Idea has been struggling with dues, owing about Rs 83,400 crore in adjusted gross revenue (AGR) dues, with annual payments of nearly Rs 18,000 crore scheduled from March 2025. Its overall dues to the government stand at around Rs 2 trillion including penalty and interest, Mint said.
The debt-laden operator has repeatedly warned it cannot survive without funding support, as banks remain wary of lending given its financial stress. Vi employs over 18,000 people and has nearly 198 million subscribers.
Telecom service provider Vodafone Idea (Vi) is exploring non-bank avenues to fund its capital expenditure plans, as negotiations with lenders remain stalled due to uncertainty over adjusted gross revenue (AGR) dues, outgoing CEO Akshaya Moondra said on August 18 during the June quarter earnings call.
Vi has also formally urged the government to settle the AGR matter ahead of the March 2026 deadline, which Moondra said would help reassure banks and unlock financing support.
"Given the fact that we are keen on maintaining a continuity of our capex, which has been going on since last year, we are looking at non-banking sources of funding, also not the full amount of Rs 25,000 crore that we have talked about, but a lesser amount so that we can continue with the capex cycle," Moondra said.
Should you buy, sell or hold?
Motilal Oswal recommended a 'Sell' rating for the stock, with a target price of Rs 6 per share. This implies a downside potential of more than 8 percent from the previous closing price of Rs 6.55 per share. “We cut our FY27-28E revenue and EBITDA estimates by ~4-5% each, driven by higher subscriber declines. We reiterate our SELL rating on Vi with a revised TP of INR6, based on DCF implied ~12.5x Sep’27E EV/EBITDA,” the domestic brokerage said.
ICICI Securities kept a 'Hold' rating for the stock, with a target price of Rs 7 per share. This implies an upside potential of nearly 7 percent from the previous closing price. "VIL has funding to incur elevated capex only till Q2FY26; its future capex is dependent on closing the funding arrangement which has been in the process for a while. VIL is also hopeful of a resolution on AGR matter before its first EMI due in Mar’26, remains critical for establishing its going concern status," the brokerage noted.
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Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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