Vodafone Idea stock witnesses POWERFUL action! What’s next? Bull or bear? Know the road ahead for investors

In a special edition of BullvsBear, the two Zee Business Research Analysts Devanshi Ashar and Varun Dubey are in a slugfest with respect to Vodafone Idea, during which Ashar batted for the revival and growth of the company while Dubey listed out the worries and concerns it’s going through so far.

The shares of cash-strapped Vodafone Idea spurted over 18 per cent to Rs 6.79 per share on the BSE intraday trade on Wednesday, as the telecom firm is in talks with banks to refinance its debt worth over Rs 6000 crore, which is due in the next few months, Ashar said while quoting it as the biggest trigger. 

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The analyst adds, even many banks in their quarterly results had agreed to communicate and help the telecom company, if needed. 

The discussion here is not regarding fresh loans but refinancing the existing loans, wherein interests could be re-worked or reduced, eventually helping Vodafone Idea to reduce their finance cost, Ashar said while being bullish on the company.

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आगे तेजी या मंदी?

देखिए Bull Vs Bear की ये जुगलबंदी#BullVsBear #VodafoneIdea @AnilSinghvi_ @VarunDubey85 @devanshiashar pic.twitter.com/LxxFRJjtv0

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To counter this, Dubey says the telecom company has over Rs 50000 crore outstanding AGR (adjusted gross revenue) dues, as compared to Rs 6000 crore refinancing, which will hardly help or reduce the debt burden of the company.

Being positive about the company, Ashar draws attention to the Prime Minister's Office’s statement, wherein government is mulling to help telecom sector and on the same line, a relief package for the industry is also being considered and perhaps this would increase investors faith in Vodafone Idea.

On the other hand, Dubey points out that the former chairman KM Birla himself has lost faith in the operation-ability in the company has offered to give up his over 27 per cent promoter stake in Vodafone Idea to the government and also resign from the top position earlier this month.

Ashar believes, following the rival’s suit, the company has increased its entry-level tariff by 61 per cent, which eventually will help to increase revenue and may also raise investors sentiment.

On the contrary, Dubey mentions the business will be intact, when customers are, as Vodafone Idea has lost 1.2 crore subscribers in Q1FY22 as compared to 20 lakh users in Q4FY21. He adds the company is yet to raise funds through the FDI route despite getting approval from the government. 

The stock has recovered the losses witnessed in the last two sessions, it had declined by over 10 per cent combine on Monday and Tuesday on the BSE. On Wednesday, it ended around 11 per cent higher to Rs 6.37 per share on the BSE, as against a 0.29 per cent decline in the S&P BSE Sensex.

So far in July, it was trading at the lowest level since July 2020 and had hit a record low of Rs 2.61per share in November 2019. The counter has been on a continuous decline since the Supreme Court rejected the telecom pleas regarding recomputing of AGR (adjusted gross revenue) dues.  

The stock since Supreme Court’s verdict on AGR plea has plunged over 30 per cent from Rs. 9.75 per share (July 22, 2021).