Vodafone Idea's Rs 45,000 Cr Revival Plan Ignites Stock Surge

Vodafone Idea's stock experienced a significant jump of up to 13% on Friday, reaching Rs 11.36. This surge followed the announcement of a substantial turnaround plan involving a Rs 45,000 crore investment in network infrastructure and aggressive marketing strategies.

The company's three-year roadmap, focusing on sustained subscriber growth and enhanced cash EBITDA, aims to triple earnings and achieve double-digit revenue expansion through FY29. A significant portion of the capital expenditure will be allocated within the next 12 to 18 months, targeting 4G network parity in priority areas.

Global brokerages presented divergent outlooks. Citi maintained a Buy rating with a Rs 14 target, citing potential catalysts, but cautioned about future debt obligations. Bank of America Securities reiterated an Underperform rating, highlighting concerns over subscriber loss and significant AGR dues.

CLSA revised its target to Rs 11 while retaining an Outperform rating, acknowledging the need for debt-raising to fund investments but cutting earnings estimates. ICICI Securities held a Hold rating at Rs 10, adjusting its valuation multiples. The company's strategy includes premiumization and upgrading customers to 4G and 5G to bridge the ARPU gap with competitors.

A crucial backdrop is the government's relief on adjusted gross revenue (AGR) dues, freezing them at Rs 87,700 crore with a 10-year moratorium, with a reassessment underway. Despite this, Vodafone Idea faces a formidable debt burden, with gross debt at Rs 209,800 crore as of 3QFY26, primarily composed of spectrum debt.

Financing the Rs 45,000 crore investment remains a key challenge. While the company is seeking debt financing, future spectrum payment increases from FY29 onwards may necessitate refinancing, equity raises, or conversion of dues, as highlighted by Citi.