Vodafone Idea shares rise 10%, touch one-year high

Vodafone Idea share price: The debt-ridden company has been in the focus lately over equity funding expectations. Vodafone Idea CEO Akshaya Moondra, in an earnings call, said, “In the last two months, our discussions with multiple groups of investors on both equity and equity-linked instruments have progressed.”

Shares of telecom operator Vodafone Idea Ltd (VIL) rose sharply in Monday’s trade. The stock surged 10.21 per cent to hit a 52-week high of Rs 11.55 against its previous close of Rs 10.48. The scrip has gained 40.99 per cent in the past one month and 71.97 per cent in six months. Around 10.51 crore shares changed hands on BSE today. This was way more than the two-week average volume of 9.09 crore shares. Turnover on the counter stood at Rs 116.95 crore, commanding a market capitalisation (m-cap) of Rs 55,397.49 crore.

The debt-ridden company has been in the focus lately over equity funding expectations. Vodafone Idea CEO Akshaya Moondra, in an earnings call, said, “In the last two months, our discussions with multiple groups of investors on both equity and equity-linked instruments have progressed. It has gained a lot of momentum, and we have seen a very good progress in the last couple of months, particularly in the last one month where some of these discussions have started progressing to a level of due diligence or proposals being discussed with these investors. We are making good progress, and we expect to conclude these discussions in the coming quarter.”

The chief executive also mentioned, “Promoters have already given support for Rs 2,000 crore of equity, some external equity needs to be tied up. And with that, the bank funding will also be tied up. So, we expect to conclude all these funding arrangements in the coming quarters. And once that happens, then we will be able to continue our investments.”

On technical setup, the counter was last seen trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-, 200-day simple moving averages (SMAs). The counter’s 14-day relative strength index (RSI) came at 82.01. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a negative price-to-equity (P/E) ratio of 1.71 against a negative price-to-book (P/B) value of 0.67.

The scrip has an analyst target price of Rs 5, Trendlyne data showed, suggesting a potential downside of 53 per cent. It has a one-year beta of 0.89, indicating low volatility on the counter.

“The stock has resistance around Rs 11.80. Investors should be booking profits at current levels as a daily close below support of Rs 9.15 could lead to target of Rs 7.5 in the near term,” said AR Ramachandran from Tips2trades.

Support on the counter could be seen around Rs 9, followed by Rs 8.5 and resistance is expected near Rs 12, said Jigar S Patel, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers. BusinessToday