Vodafone Idea Shares Are a High-Risk Buy With a Target Price of Rs 12: Citi

Vodafone Idea Shares Are a High-Risk Buy With a Target Price of Rs 12: Citi
Global brokerage firm Citi has a ‘Buy (High Risk)’ rating on Vodafone Idea, with a price target of Rs 12. In its research report dated April 13, 2025, the firm noted that the government’s recent conversion of Rs 36,950 crore in Vi’s spectrum dues into equity—resulting in a 49 percent stake—could provide a boost to the company’s pending Rs 25,000 crore debt raise.

  • Make Telecom Talk My Trusted Source
  • Source of Google
  • Source of Google

Also Read: Vodafone Idea Ongoing 5G Launch Should Improve Sentiment; Govt Equity Conversion a Big Positive: Citi

Annual Dues Significantly Reduced

“The investment-grade credit rating should, in our view, provide a meaningful boost to Vi’s efforts to complete its long-delayed bank debt raise, as this is typically one of the key requirements for banks to provide lending,” Citi Research said.

The brokerage added that following the equity conversion, Vi’s annual dues to the government (spectrum and adjusted gross revenue) for FY26, FY27, and FY28E are now reduced to around Rs 19,000 crore, Rs 23,000 crore, and Rs 32,000 crore respectively, down from approximately Rs 30,000 crore, Rs 43,000 crore, and Rs 43,000 crore earlier.

Also Read: Are Vodafone Idea’s Cheap Plans and Top 4G Network Paying Off? Here’s What Subscriber Stats Show

Assuming Fundraise of Rs 25,000

“Assuming VI were to succeed in closing out its Rs 25000 crore bank debt funding, which is crucial for the company’s planned capex, we estimate no cash shortfall in FY26E but a potential shortfall in FY27E (primarily due to the high AGR amount payable of Rs 16500 crore per annum). Vi remains in discussions with the government for potential relief on the latter,” Citi Research said.

“With the company now coming back into the investment grade rating, which is the requirement for the banks to provide funding, the debt funding discussions should now progress in the right direction,” a Vi spokesperson told ETTelecom in a written response.