Stock Market: Vodafone Idea share price strategy unveiled by experts

Stock Market: Vodafone Idea share price crashed over 3 per cent on Friday and closed at Rs 12.15 per stock levels. According to the Zee Business expert panel, the telecom share is expected to remain highly volatile, though its board has given its approval to generate Rs 25,000 crore to pay its AGR dues. However, experts maintained that the AGR dues of Vodafone Idea is to the tune of Rs 50,400 crore, which is just 50 per cent of the fund raise target of Vodafone Idea. Experts were of the opinion that the rest of the funds required to pay AGR dues has to be generated via operations and for that the company will have to double its annual EBITDA or earnings before interest, taxes, depreciation, and amortization.

Suggesting stock market investors to hold Vodafone Idea shares, Sandeep Jain of TradeSwift told Zee Business, "The Board of Directors have given approval for generating Rs 25,000 crore while the AGR payment dues of the company is Rs 50,400 crore which is almost double of the Vodafone Idea fund raise target. So, it's for sure that the company will have to arrange the rest of the funds from its operations and for that it will have to double its annual EBITDA from its existing position. I am expecting the Vodafone Idea share price to remain extremely volatile in the coming trade sessions and advise hold, if someone has existing position in the telecom counter."

See Zee Business Live TV streaming below:

Giving details of the Vodafone Idea share price fundamentals, Kushal Gupta, expert panel member of Zee Business said that Vodafone Idea board has given approval for generating Rs 25,000 crore. The company targets to generate Rs 15,000 crore from equities while it plans to generate additional Rs 15,000 from NCDs or bonds.

"To meet the rest 50 per cent of its AGR payments dues, Vodafone Idea needs to increase its ARPU (Average Revenue Per user) and that can be done by increasing its customer base as the board has not given any indication of increasing its tariff. So, it's a big relief for the Vodafone Idea users. Gupta also said that the company will get Rs 4,000 crore from the Indus Tower Deal.

Watch full coverage in video below:

अगले हफ्ते कैसे खुलेंगे बाजार, किन बातों का रखें ध्यान?
जानने के लिए देखिए #BazaarAgleHafte अनिल सिंघवी के साथ। @AnilSinghvi_ https://t.co/n1ebN0dEZ3

— Zee Business (@ZeeBusiness) September 4, 2020

On whether one should take a fresh position in Vodafone Idea shares, Sandeep Jain said, "Those who don't have any position in Vodafone Idea should avoid taking any fresh position in this counter as other telecom stocks are better placed and they can give more returns than Vodafone Idea."