Riding On Speculation Of Equity Infusion By New Investor, Vodafone Idea Hits 52-Week High
Shares of telecom operator Vodafone Idea Ltd have been on the rise on a funding buzz. The stock has gained 51% in the past month. On Friday, it jumped 9.63% to reach a 52-week high of Rs. 11.95. The counter has given multibagger returns to its investors with a gain of 109.65% from its one-year low price of Rs. 5.70, registered on March 31, 2023.
Vodafone Idea CEO Akshaya Moondra had earlier confirmed the equity funding possibilities, saying that consultations with multiple groups of investors are ongoing. “We are making good progress, and we expect to conclude these discussions in the coming quarter,” Moondra had said in August.
“And once that happens, then we will be able to continue our investments,” Moondra further stated. With the proposed funding, equity investors will be able to acquire more stake in the company, reducing the promoters’ holdings, which currently stand at 75%.
The company has an agreement with the Indian government to convert its Rs. 16,000-crore debt into equity, further diluting the promoters’ holdings after the conversion. The Aditya Birla Group and Vodafone Plc are the promoters of the company.
With this scenario, the company may defer its plans to monetize Rs. 7,600 crores worth of assets. However, analysts are bearish on the Vodafone Idea stock considering the surge witnessed in the last month. According to AR Ramachandran from Tips2trades, the stock may face resistance around Rs. 11.80. Therefore, he advises investors to book profits at current levels.
