Vodafone Idea stock rallies 8%, extending gains on plans to raise funds

Shares of Vodafone Idea Limited zoomed 8 percent to Rs 17.60 in the morning trade on February 23, extending gains for the second day after a 6 percent jump in the previous session.

The rally follows an announcement from the telecom operator that its board of directors will meet on February 27 to consider all proposals for raising funds in one or more tranches by way of a rights issue or further public offer or private placement of shares, including preferential allotment, qualified institution placement, or through any other permissible mode.

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In the third quarter of the fiscal year 2023-24, the company recorded a net loss of Rs 6,985.9 crore, reflecting a decrease of 12.56 percent compared to Rs 7,990 crore in the corresponding period of the previous year.

However, the revenue for the same quarter amounted to Rs 10,673.1 crore, registering a slight increase of 0.49 percent from Rs 10,621 crore in the third quarter of the preceding fiscal year.

Nuvama analysts have issued a “reduce” recommendation for the stock, citing concerns stemming from the company’s Q3FY24 earnings. The report highlights the importance of closely monitoring the capital-raising efforts and the Average Revenue Per User (ARPU) trajectory. Additionally, Nuvama emphasizes the need for the company to prevent falling significantly behind its peers in the rollout of 5G technology.

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