Shares of Vodafone Idea Ltd fell as much as 7.9 per cent to Rs 38.15, their lowest since October 31, as the telecom operator has reported Q2 loss of Rs 4,974 crore ($690.07 million), mainly due to a one-off charge for integration and merger-related costs.
The company said it is looking to raise about Rs 25,000 crore, in which promoters Vodafone Group will chip in Rs 11,000 crore and Aditya Birla Group Rs 7,250 crore.
Jefferies says it expects Idea to be the no. 3 player by early FY20 and continue to lose market share over the next two years. It has retained “underperform” and cut the price target to Rs 30 from Rs 50.
Citi says the investment amounts to significant dilution at current depressed valuations but should be positive, as it should help address the going-concern risks emanating from high leverage and losses. The brokerage has assigned “high risk” rating because of inherent volatility due to high leverage, and a price target of Rs 83.
Vodafone Idea's stock posted biggest intraday percentage drop since October 4; more than 18.3 million shares changed hands, compared with the 30-day moving average of about 17 million shares. The stock had fallen about 61.7 per cent this year as of Wednesday ($1 = 72.0800 Indian rupees).