CITI has reiterated its ‘Buy’ rating on Vodafone Idea and set a target price of ₹12 per share, indicating a substantial upside from the current market price of ₹6.80. The brokerage called the recent decision by the Indian government to convert a portion of the telecom operator’s outstanding spectrum dues into equity a material development with significant positive implications.
The conversion will take place at ₹10 per share, representing a 47% premium to Vodafone Idea’s current stock price. Following this move, the government’s stake in the company is expected to rise from 22.6% to 49%, although operational control will continue to rest with the promoters.
CITI believes this strategic move is a strong signal of government support, offering meaningful cash flow relief over the next three years. It is also likely to facilitate Vodafone Idea’s ongoing efforts to raise bank debt, a critical step in funding its network and operational expansion plans.
The brokerage added that the development could alleviate concerns for tower companies like Indus Towers, with which Vodafone Idea is a key client. It has placed both Indus Towers (Buy; top pick) and Vodafone Idea (Buy/High Risk) on a 90-day upside catalyst watch.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a qualified financial advisor before making any investment decisions.
