Why Vodafone Idea Share Price is Falling

Just when investors saw Vodafone Idea's stock price rise over 100% in the past 6 months, the company faced a major roadblock.

In the past five days, the stock has fallen over 10% with today's 15% crash contributing to most of the losses.

In 2024 so far, Vodafone Idea share price has fallen 19% already.

Let's find out whether the downtrend will continue or if the telecom major can take some steps to overcome this big hurdle.

Why Vodafone Idea Share is Falling

#1 Fundraising not Enough for the Massive Pile of Debt

A couple of days ago, it was reported that Vodafone Idea will raise Rs 200 billion (bn) to pare down debt from its massive pile of over Rs 2.5 trillion (tn).

No doubt, this move will help the telco cover its upcoming dues and take big strides towards the 5G rollout.

But market experts are concerned that this fundraise would not be enough and because there's still ambiguity over the contours of this fundraising.

Vodafone Idea has already missed the 5G bus and lags its two big competitors - Reliance Jio and Bharti Airtel.

Vodafone Idea is expected to convene a meeting of its shareholders on 2 April 2024, and seek approval to complete the equity fund-raise in the coming quarter.

#2 HUGE Q3 Loss

Apart from the fundraise failing to enthuse investor sentiment, investors are also concerned about the telecom company's expanding losses and falling subscriber base.

In the third quarter of the current financial year 2023-24, Vodafone Idea recorded a net loss of Rs 69.9 bn compared to a loss of Rs 79.9 bn in the corresponding period of the previous year.

The losses narrowed due to a gain of Rs 7.5 bn from a favourable order on a litigation with the government.

Note that Jio and Airtel are making the most of the 5G opportunity and cornering bulk of Vodafone subscribers.

What Next?

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, and the Metaverse, the telecom and tech industries are poised to reach new heights.

In this upcoming fund-raise, even its promoters are expected to participate and provide financial support.

Going forward, the company is planning to improve its network coverage in Ayodhya.

All these developments are set to bolster Vodafone Idea's position in India.

However, investors should note that it won't be a swift recovery for the company. Investors should track the fundamentals and latest developments of the company closely.

How Vodafone Idea Share Price has Performed Recently

In the past five days, Vodafone Idea share price is down around 10%.

In the past one year, shares have delivered a multibagger return of 103%.

Vodafone Idea has a 52-week high of Rs 18.4 touched on 1 January 2024 and a 52-week low of Rs 5.7 touched on 31 March 2023.

About Vodafone Idea

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

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

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

Happy Investing!

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