Merger, sale: What's next for struggling telco Vodafone Idea?
What's the story
Shares of Vodafone Idea have plunged by 3% today, after an 8% fall yesterday.
The decline was sparked after the Supreme Court dismissed the firm's writ petition seeking further relief on its Adjusted Gross Revenue (AGR) dues of ₹30,000 crore.
The share has fallen over 35% from its Follow-On Public Offer (FPO) price of ₹11 and over 65% from its 2024 peak of ₹19.18.
So, what's next for the company? Let's find out.
Expert insight
Ex-Bharti Airtel CEO comments on VI's situation
Former Bharti Airtel CEO Sanjay Kapoor has termed Vodafone Idea's situation as 'precarious.'
He was doubtful that the government would be able to go beyond a 51% shareholding threshold in Vodafone Idea, given its commitments to BSNL and MTNL.
The National Company Law Tribunal (NCLT) could be a possible way out for the telecom operator, which has warned it may not survive beyond FY2026, without further government support.
Merger speculation
Potential merger and investor interest
Kapoor dismissed the possibility of Vodafone Idea merging with current competitors, Reliance Jio and Bharti Airtel.
He argued that these leading operators are already capturing market share from VI without any investment or acquisition.
Kapoor suggested that Vodafone Idea has likely approached every global operator and investor for support, but there has been no significant interest so far.
International interest
Global operators' interest in VI remains elusive
Kapoor pointed out that American operators have come and gone from the Indian market without investing in Vodafone Idea.
He further elaborated that due to frequent capital cycles, third and fourth operators are becoming less competitive globally.
Investing in a third operator like VI is considered risky as two big players dominate the market.
Analyst opinions
Analysts divided on Vodafone Idea's stock outlook
Out of 21 analysts covering Vodafone Idea, five recommend a "buy" rating on the stock, four suggest a "hold," while 12 have given it a "sell" recommendation. As of today, shares of Vodafone Idea ended down 2.23% at ₹6.57 per stock.