Citi has maintained its ‘Buy (High Risk)’ call on Vodafone Idea (VI), assigning a target price of ₹12, as it sees recent developments significantly improving the company’s financial and strategic outlook. The stock currently trades at ₹7.18, implying a potential upside of 67% from current levels.
The brokerage’s optimism follows the government’s recent move to convert ₹37,000 crore worth of spectrum dues into equity, giving it a 49% stake in the telecom operator. This has led to credit rating agency ICRA upgrading VI’s rating to investment grade (BBB–).
Citi highlighted that this marks a crucial turning point for Vodafone Idea, as the upgrade now enables access to bank debt, a key hurdle the company has been struggling with. VI’s last upgrade came in June 2024, when CARE Ratings moved it from B+ to BB+, post the successful completion of its ₹18,000 crore follow-on public offer (FPO).
The brokerage added that with an improved balance sheet and the government’s backing, the company is better positioned to raise long-pending funding from banks and progress with its operational revival. Citi also maintains a Positive Catalyst Watch on both Vodafone Idea and Indus Towers.
Disclaimer: The above views are of the brokerage and not of the author or the publication. Please make any and every investment decision after consulting your financial advisor.
