Vodafone Idea (NSE: IDEA) surged 10% to hit the upper circuit at ₹7.48 on April 1, 2025, following strong positive sentiment after the government’s decision to convert spectrum dues into equity, as highlighted by CITI.
According to CITI, which maintains a ‘Buy’ rating with a target price of ₹12, this move is a “material development” with significant positive implications. The conversion price of ₹10 per share is at a 47% premium to the current levels, and is expected to provide meaningful cash flow relief over the next three years, aiding Vodafone Idea in completing its bank debt raise. CITI also expects this to alleviate concerns for tower partners like Indus Towers, and has placed both Vodafone Idea and Indus on a 90-day upside catalyst watch.
On the other hand, Macquarie remains cautious, maintaining a ‘Neutral’ rating with a target price of ₹7, calling the recent developments a “bandage” that does not resolve long-term structural issues. The brokerage warns of significant equity dilution risks for minority shareholders due to continued free cash flow constraints.
With over 23.3 crore shares traded and the stock locked at the upper limit, the investor interest is clearly strong. However, opinions remain divided, with CITI optimistic on a re-rating and Macquarie urging caution due to dilution and structural debt repayment challenges.
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.
