Vodafone Idea re-enters top-100 most-valued firms list, zooms 129% in 1 mth

Influential brokerage CLSA on Wednesday issued a ‘buy’ rating on the stock with a 12-month price target of Rs 12
Vodafone Idea has re-entered the elite club of top-100 most valued Indian companies in terms of market valuation as the stock price of the telecom services provider more-than-doubled in the past one month. Vodafone Idea is promoted by British telecoms giant Vodafone Plc and Indian Aditya Birla group.

With market capitalisation (m-cap) of Rs 26,522 crore, Vodafone Idea stood at number 96th position in the overall m-cap ranking at 09:27 am, the BSE data shows. The company has seen Rs 14,625 crore m-cap addition in the past one month and notched up 75 positions from 171th position as on May 5, 2020. The company fell out from the top 200 positions and was at 243rd ranking with an all-time low m-cap of Rs 8,477 crore on November 11, 2019.

However, in the past one month, Vodafone Idea surpassed United Breweries, Whirlpool of India, Honeywell Automation of India, Power Grid Corporation, Pfizer, Adani Transmission, ACC, PI Industries, Bank of Baroda and Jubilant FoodWorks in market-cap ranking.

The stock has, so far, surged 10 per cent to Rs 9.49 in the intra-day trade today on the BSE. It trades in the futures & option (F&O) segment and thus has no circuit limits.

That apart, the shares of the telecom services provider hit an over nine-months high today and was trading close to its face value of Rs 10, which last time seen on July 26, 2019. In the past one month, the stock has zoomed 129 per cent from level of Rs 4.10, as compared to 7 per cent rise in the S&P BSE Sensex.

Thus far in the current week, Vodafone Idea has soared 45 per cent on reports that the global technology giant Google is in talks to buy a 5 per cent stake in the company. The company, however, clarified on May 29 that it was constantly evaluating various opportunities but there was no proposal before the board of the firm as yet.

“As part of the corporate strategy, the company constantly evaluates various opportunities for enhancing the stakeholders’ value. As and when such proposals are considered by the board of directors of the company warranting disclosures, the company shall comply with the disclosure obligations,” Vodafone Idea said.

Meanwhile, according to a Business Standard report, influential brokerage CLSA on Wednesday issued a ‘buy’ rating on the stock with a 12-month price target of Rs 12. The foreign brokerage firm sees further upside from average revenue per user (Arpu) growth, likely adjusted gross revenue (AGR) resolution and potential floor tariffs.

With the return of growth led by tariff hikes, Vodafone Idea promoters may assess incremental funding, irrespective of AGR cases outcome. Vodafone Idea’s Arpu Rs 109 is nearly 20 per cent lower than Airtel. CLSA expects the company’s Arpu to grow by 30 per cent by FY22 underpinned by tariff hikes. CLICK HERE TO READ FULL REPORT

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