Why Vodafone Idea Share Price is Rising

There was a crazy rally in the public markets in 2023. The benchmark Nifty 50 surged by nearly 20%, while the Sensex delivered returns exceeding 18%.

The party didn't stop there. The overall market capitalisation of all companies listed on the BSE crossed a staggering Rs 3.7 trillion (tn), a testament to the immense growth and value churning within the system.

December 2023 emerged as the undisputed champion of monthly returns, with the Nifty 50 recording a jaw-dropping 7% surge, the highest monthly gain of the year.

This wasn't just a case of the usual bluechip heavyweights hogging the limelight. Even underdogs like Vodafone Idea, a stock that had languished and plunged 50% in 2022, saw a major comeback.

Its shares were trading at a measly Rs 8 but fast forward to the final trading day of December, and the telco's stock jumped 21% to reach Rs 16. That's not just a double-digit gain, it's a staggering 100% year-on-year rise.

In the last six months, the share price of Vodafone Idea has increased 113%, more than doubling shareholder's wealth.

2023 was the best year for its shares on the stock market since it was listed in 2007.

Let's find out why...

Exchanges Seek Clarification on Tie Up with Elon Musk's Starlink

Shares of the company were in focus today after the exchanges sought clarification from the telecom company regarding media reports on its possible tie-up with Elon Musk's Starlink.

Vodafone Idea's reply on the market regulator's query is still awaited.

A news report last week claimed that the Government of India (GoI) may sell its 33% stake in the telecom company to tech-giant and American billionaire Elon Musk and that his satellite internet venture Starlink would collaborate with the carrier.

This led to a rally in the company's shares.

The news report said that Elon Musk's Starlink requires a spectrum partner in India for its space linked broadband business and that Vodafone Idea could be a potential suitor for this.

Amazon's Project Kuiper is also keen to enter India for its broadband business and would require a spectrum partner.

The company would be competing against the likes of Elon Musk-owned Starlink, Bharti-backed Oneweb and Reliance Industries' Jio Satellite in India.

While Bharti and Jio have their own satellite platforms, this leaves Vodafone Idea open for a tie-up with Elon Musk or Amazon.

What Next?

Vodafone Idea is involved in realising the government's vision of establishing a robust supply chain in critical and emerging areas, including Open RAN (Radio Access Network).

The telecom sector is currently facing a demand-supply gap of 2.41 million, and this is expected to increase significantly to 3.8 times by 2030, providing a substantial boost to the telecom industry.

The telecom sector holds a significant position in India, being the third-largest industry and contributing approximately 6.5% of all FDI inflow.

Additionally, by 2027, India is projected to account for 11% of all 5G subscriptions globally. As technology advances into the era of Web 3.0, the proportion of software in the telecom sector is expected to triple.

Emerging trends suggest that with the integration of AI and the advent of more powerful 6G network technologies by 2023, along with harnessing the value of IoT, RPA, AI/ML, and the Metaverse, the telecom and tech industries are poised to reach new heights.

These developments are set to bolster Vodafone Idea's position in India as it navigates the evolving telecom landscape.

How Vodafone Share Price has Performed Recently

In the past month, shares of the company have gained 28.9%.

The stock has gained 124.5% in the past six months and around 112% in the year gone by.

The stock touched its 52-week high of Rs 18.4 on 1 January 2023 and a 52-week low of Rs 5.7 on 31 March 2023.

At the current price, the company trades at a price to earnings multiple of 49 and price to book value multiple of 2.25x.

About Vodafone

Vodafone Idea is an Aditya Birla Group and Vodafone group partnership. It's among India's leading telecom service providers.

The company provides pan India voice and data services across 2G, 3G, and 4G platforms.

On 31 August 2018, Vodafone India merged with Idea Cellular, to form a new entity named Vodafone Idea. Vodafone holds a 45.1% stake in the combined entity and Aditya Birla Group holds a 26% stake.

On 7 September 2020, Vodafone Idea unveiled its new brand identity, 'Vi' which involves the integration of the company's erstwhile separate brands 'Vodafone' and 'Idea' into one unified brand.

The company is developing infrastructure to introduce newer and smarter technologies, making both retail and enterprise customers future ready with innovative offerings.

For more details about the company, you can have a look at Vodafone Idea's factsheet and Vodafone Idea's quarterly results on our website.

You can also compare Vodafone Idea with its peers.

Vodafone Idea vs Bharti Airtel

Vodafone Idea vs Tata Communications

Vodafone Idea vs MTNL

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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