Vodafone Idea shares rally 7% on plans to fund Rs 10,000-crore expansion

Vodafone Idea shares have risen almost 20 percent in the last three months.

Shares of Vodafone India rebounded on February 13, climbing as much as 7 percent to Rs 8.99, as upbeat management commentary lifted sentiment following a three-day decline on the bourses.

The Mumbai-based telecom company suggests that it will invest Rs 10,000 crore in expanding its network by the end of March, nearly matching its total capital expenditure for the first nine months of the fiscal year. The Aditya Birla Group company has already spent Rs 5,300 crore on capex between April and December 2024, according to brokerage reports.

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While the telecom operator is gearing up for aggressive expansion, it requires around Rs 35,000 crore in bank funding to support its plans. "We expect to secure bank financing within the next seven to eight weeks. As of June 30, 2024, we had a closing cash balance of Rs 18,000 crore, which is sufficient to carry out our capex plans in the meantime," the management said. More significantly, the company is optimistic about persuading the government to convert the remainder of its dues into equity.

Following an unsuccessful appeal for a recalculation, Vodafone Idea now faces a Rs 43,000 crore payout. Of this, approximately Rs 17,000 crore consists of deferred instalments covered under the telecom relief package, which could potentially be converted, the company said. "The remaining Rs 26,000 crore comprises regular instalments that were due even before the moratorium," it added.

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During the quarter, the major reported that its net loss narrowed marginally to Rs 6,609 crore, as against Rs 6,986 crore net loss in the year-ago period. The telco's revenue from operations rose 4 percent to Rs 11,117 crore in Q3FY25 as against Rs 10,673 crore in Q3FY24.

The firm's ARPU or average revenue per user rose to Rs 173 in the December quarter from Rs 166 a quarter ago, a rise of 4.7 percent, driven by tariff hikes and customer upgrading to higher plans. The 4G subscriber base stood at 126 million at the end of Q3FY25, increasing from 125.6 million as of Q3FY24. Vi's total subscriber base stood at 199.8 million in the December quarter, down from 215.2 million in the third quarter of last fiscal.

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At about 2:10 pm, shares of the company were trading at Rs 8.74, higher 4.2 percent from the last close on the NSE. Vodafone Idea shares have risen almost 20 percent in the last three months.

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