Shares of Vodafone Idea rebounded sharply on February 13, climbing 7% to ₹8.99, as investors cheered the telecom company’s plans for a ₹10,000 crore network expansion by the end of March. The positive management outlook helped reverse a three-day losing streak in the stock.
The Aditya Birla Group-backed telecom operator has already spent ₹5,300 crore on capital expenditure between April and December 2024. However, to fully execute its aggressive expansion strategy, the company requires an additional ₹35,000 crore in bank funding.
Bank Funding & Government Equity Conversion Plans
Vodafone Idea’s management indicated that it is set to raise funds from banks in the next 7–8 weeks. The closing cash position of the company was at ₹18,000 crore as of June 30, 2024, something that it is optimistic would be sufficient to take care of short-term working capital needs and capex requirements. The company is also hopeful that a portion of its government arrears would be converted to equity.
Following an unsuccessful recalculation application of its dues, Vodafone Idea is now weighed down with a liability of ₹43,000 crore. Of this, ₹17,000 crore is in terms of instalments that can be converted to equity in case of moratorium conversion to instalments. The remaining ₹26,000 crore is in terms of instalments to be paid during the moratorium period.
Financial Performance in Q3FY25
In the third quarter of December, Vodafone Idea’s net loss was slightly smaller at ₹6,609 crore compared to a year earlier at ₹6,986 crore. The revenue from operations was higher at 4% to ₹11,117 crore compared to ₹10,673 crore in Q3FY24.
The company’s average revenue per user (ARPU) also went up to ₹173 in Q3FY25 from ₹166 in the previous quarter, a 4.7% expansion that was driven by price hikes and upgradation of higher-value plans by users. The number of 4G subscribers was up slightly to 126 million, while total subscriber count dipped to 199.8 million from 215.2 million in the same period of the previous year.
At 3:20 PM, Vodafone Idea shares were trading at ₹8.63, up 2.8% on the NSE. The stock has gained nearly 20% in the last three months, reflecting investor optimism over the company’s revival plans.
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Source: Moneycontrol
