Vodafone Idea (Vi) Ltd (Rs.6.81) – Turnaround Play or Trap?

Dear Friends,

I think you remember that I had already discussed the scrip of Vodafone Idea multiple times before, so today, I'll skip the usual details and focus only on the key points.

Why Vi Matters Now ?

India’s No. 3 telecom (212M users) player is pivoting from survival to revival. Government rescue + 5G bets spark hope — but execution is key.  

Catalysts:

- Govt Backstop: ₹36,950 crore debt converted to equity (49% stake) cuts leverage, unlocks fundraising hopes. Advanced talks with global PE firms for fresh capital.  

- 5G Offensive: Live in Mumbai, expanding to Delhi, Bangalore, Chandigarh, Patna by April. Plans priced 15% below Jio/Airtel to regain users.  

- Nokia Boost: Upgraded optical network improves 4G/5G speeds.  

Risks:  

- Bleeding Cash: Q3 FY25 loss = ₹66 bn ARPU (₹173) still trails rivals.  

- High-Stakes Capex: Must spend aggressively to match Jio/Airtel’s 5G coverage.  

- Customer Churn: Users switching to financially stronger competitors.  

Price Targets: 

- Citi (Bull Case): ₹12 (76% upside)  

- Realistic Range: ₹10-12 if funding closes soon.  

Verdict: High-risk, high-reward. 

Watch:

1. Funding deals = Confirms Buy signal.  

2. Delays = Avoid.