Source: Moneycontrol
Vodafone Idea’s stock price fell more than 2% during early trading on Tuesday, following a statement from the telecom company that it had rekindled talks with the central government regarding relief on its long-delayed and tight Adjusted Gross Revenue (AGR) dues, totaling several years of carryover due to the company’s financial position.
While early indications don’t tell the whole story, the stock was somewhat resilient and made its way back up to an intraday high of ₹7.02 by 9:20 AM on June 3.
Vodafone Idea is in extreme financial trouble. The telecom company owes almost ₹30,000 crore in AGR dues to the Government of India and the Supreme Court denied its plea for relief, making things worse for Vodafone Idea. After the court ruling, Vodafone Idea sent an urgent appeal to the Department of Telecommunications, and disclosed it can no longer operate beyond FY 2025–26 without timely support.
When asked about the situation Akshaya Moondra, CEO said that the company is talking to banks about borrowing debt to support their long-term growth and expansion. But, she added the Banks will require clear details about the telecom company’s outstanding dues to the government before approving any loans.
Moondra stressed that the government should be able to determine policy without impediment, which can include assistance of struggling telcos with parameters such as financial relief. He stressed that the government must have complete autonomy in granting relief, as it is a policy matter that falls outside the jurisdiction of the judiciary.
commented that low average revenue per user (ARPU) and historically low data prices in India are preventing telcos from being able to recover their investments in telecom infrastructure. Moondra explained, suggesting that heavy data users may be charged higher prices can create a more equitable treatment system and assist with the sector’s overall financial health.
Notwithstanding those concerns, Vodafone Idea’s net loss in the fourth quarter of FY25 fell to ₹7,166.1 crore. In a bid to shore up its finances, the company’s board recently approved a proposal to raise up to ₹20,000 crore in various ways, although this proposal still requires action from shareholders and approval from regulators.
The company is also losing subscribers. According to numbers from the Telecom Regulatory Authority of India (TRAI), Vodafone Idea lost 6.47 lakh subscribers in April alone, leaving it with 20.47 crore total subscribers, impacting its competitiveness further.
Should You Buy, Sell, or Hold?
Riyank Arora, a Technical Analyst at Mehta Equities Ltd, said “A breakout above ₹7.00 with volume can add momentum to the move. However, if it breaks below ₹6.80, weakness could set in, and the stock may drift lower. Traders can consider buying with a stop-loss at ₹6.80, aiming for ₹7.55 in the near term. The trend remains cautiously positive above support,”.
Vodafone Idea will remain focused on executing its business strategy with recent positive headlines and is busy raising funding to ultimately invite government support. The upcoming months will determine the future of the company as its survival and recovery hinges on its ability to acquire capital and raise investor interest. Investors and industry observers will be looking at how this progresses, and whether the Vodafone idea will be able to change things in a challenging market.
