Explained: Vodafone Idea's stock surge and the 3 key factors behind it
By Gargi Chaudhry | First Published Sep 23, 2024, 1:21 PM ISTVodafone Idea shares witnessed a surge after a prolonged decline. The key drivers behind this surge are Nomura's 'Buy' rating, UBS's target price of Rs 19, and a new network deal worth Rs 30,000 crore.
Vodafone Idea Share Price: Telecom company Vodafone-Idea's shares witnessed a surge on Monday. After a prolonged decline, the stock showed a significant gain on September 23rd. At one point, the share price reached a day's high of Rs 11.94. However, some profit booking was observed later, and the share is currently trading at Rs 11.06, up by 5.64%. Let's understand the reasons behind this surge after the fall.
What is the first reason?
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Foreign brokerage firm Nomura has upgraded Vodafone-Idea's stock rating. Nomura has upgraded Vodafone Idea's rating from 'Neutral' to 'Buy'. Earlier, Vodafone received a major setback from the Supreme Court in the AGR dues case when the SC rejected the telecom companies' plea for re-calculation. Due to this, the company's shares fell by 20% on Thursday. Vodafone Idea currently owes Rs 70,300 crore in Adjusted Gross Revenue (AGR).
What's next?
Apart from Nomura, another brokerage firm UBS has also given a BUY rating to this stock. UBS has set a target price of Rs 19 for this stock. UBS says that Vodafone-Idea may get extra time from the government to convert the debt into equity or to repay it, which is largely positive for the company.
Last reason is...
Vodafone Idea has signed a deal worth around Rs 30,000 crore with Nokia, Ericsson, and Samsung. This deal has been made for the supply of network equipment for the next three years. Vodafone Idea's shares saw a jump of 8.5 percent on the morning of Monday, September 23rd, after this news. The objective of this deal is to expand 4G coverage from 1.03 billion to 1.2 billion people. Apart from this, the deal also aims to launch a 5G network and increase capacity along with data growth.
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