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Vice President of Product Development at Relm Insurance
Madhav Sheth
CEO of Ai+ Smartphone
Stephen Rose
CEO Render Networks
Vodafone Idea (Vi) shares came under pressure after global brokerage firm Macquarie downgraded the telecom operator’s stock rating to ‘Underperform’ and slashed its target price to Rs 6.50, down from Rs 7. The downgrade comes in response to the recent equity dilution by the Government of India (GoI), which has resulted in a significantly increased government stake in the company, according to an ET Telecom report.
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Also Read: Indian Government to Raise Stake in Vodafone Idea to 48.99 Percent
Govt Equity Conversion
Following this downgrade by the brokerage firm, Vi’s stock ended 3 percent lower at Rs 7.95 on the NSE on Friday.
The Government of India has decided to convert Vodafone Idea’s outstanding spectrum dues for FY26 into equity, raising its ownership in the company from 22.60 percent to 48.99 percent. As a result, the Aditya Birla Group’s stake has declined to 9.5 percent from 14.4 percent, while the Vodafone Group’s shareholding has dropped to 16.1 percent from 24.4 percent.
Also Read: Banks Wary of Lending to Vodafone Idea Despite Government’s Equity Boost: Report
Vi’s Cash Flow Remains Insufficient
While the move underscores the government’s intent to support a three-player telecom market, Macquarie had expected an extension of payment timelines rather than another round of equity dilution. The brokerage highlighted that Vodafone Idea’s free cash flow remains insufficient, making it challenging for the company to meet its financial obligations organically, without further equity infusions, as per the report.
