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Vodafone Idea, a prominent telecom company, witnessed a significant downturn on February 28, with its share price plummeting by up to 14 percent.
Despite the board’s decision to raise a substantial Rs 45,000 crore in funds, the stock failed to garner positive sentiment in the market.
Commencing the day with gains at Rs 15.76 on the Bombay Stock Exchange (BSE), the stock quickly experienced a 13 percent decline, reaching Rs 13.81 from the previous day’s closing price. By the end of the trading session, the share settled at Rs 13.65, marking a steep 14 percent fall.
The stock hit its lower circuit limit of 10 percent, prompting an increase in the circuit limit to 15 percent.
The lower and upper price bands for the share were set at Rs 13.49 and Rs 17.45, respectively.
Vodafone Idea’s 52-week high and low stood at Rs 18.42 and Rs 5.70, respectively, with a market capitalization of Rs 67,908 crore.
To address its financial challenges, Vodafone Idea announced plans to raise Rs 20,000 crore through a combination of equity or equity-linked instruments, with the remainder to be secured through debt.
The company disclosed that promoters would actively participate in this fundraising initiative.
A shareholder meeting is scheduled for April 2, where approval will be sought, and upon obtaining it, the company anticipates completing the equity fundraising in the subsequent quarter.
However, even with this proposed fund infusion, brokerage firms have maintained a cautious stance on Vodafone Idea.
Despite the capital-raising efforts, the company continues to grapple with a crisis, leading Nomura to issue a ‘reduce’ call on the stock.
Nomura expressed skepticism, asserting that raising funds alone might not suffice to rescue Vodafone Idea from its dire situation.
Consequently, Nomura assigned a target price of Rs 6.5 along with the ‘reduce’ recommendation, indicating a lack of full confidence in the company’s ability to overcome its challenges.
The market awaits further developments as Vodafone Idea navigates through these turbulent times.
Source:
Vodafone Idea Share Price Down 14%
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