Summary
Vodafone Idea got a thumbs-up from Motilal Oswal, moving their rating from Reduce to Neutral. Meanwhile, Citi is sticking with a High-Risk Buy and a price target of ₹10. This good news comes because the Supreme Court said the Government of India can rethink Vodafone Idea’s issues with Adjusted Gross Revenue (AGR) payments. This could really change the company’s money situation.
Vodafone Idea’s stock jumped almost 10% on Monday (October 27), ending at ₹10.02, even hitting ₹10.57 during the day – the best it’s been since September 2024. Experts think this shows the market is feeling better about the chance of the government stepping in to help and the company turning things around.
Motilal Oswal’s Upgrade: From Reduce to Neutral, Target ₹10
On Tuesday, October 28, Motilal Oswal changed their mind about Vodafone Idea, upping the stock to Neutral from Reduce and raising the price target from ₹6.5 to ₹10. They said the Supreme Court’s AGR decision could open the door for the government to step in, giving Vodafone Idea a lifeline to handle its growing debt and fix its network.
It’s a big change in feeling for the company, which has been struggling with AGR debts and trouble getting bank loans.
Citi’s View: AGR Help Could Start a Good Trend
Citi thinks the Supreme Court letting the government look at Vodafone Idea’s AGR problems is a good thing for Vodafone Idea and Indus Towers.
Citi figures that because a big AGR payment is due in March 2026, any help would come way before that. They’re keeping their ₹10 price target and believe AGR relief could lead to good things, like:
Banks trusting Vodafone Idea again, so they can get loans.
New stock sales, which could lower the government’s 49% stake.
Better dividend payments from Indus Towers because Vodafone Idea is paying its bills.
Citi also says Buy for Indus Towers, with a ₹460 price target.
What the Government Could Do
Experts point out some things the government might do to help Vodafone Idea:
Give them more time to pay back AGR debts, which are now due by March 2031.
Forgive some interest and penalties.
Fix mistakes in how AGR was calculated before.
Solicitor General Tushar Mehta said the government won’t recalculate AGR debts, but they might suggest a support plan that the Supreme Court has to OK.
Why AGR Help Matters
Any money help would give Vodafone Idea the cash they need to borrow up to ₹25,000 crore in bank loans to upgrade their network and grow their 5G. They’ve already raised ₹18,000 crore.
This shows they’re trying to change things, but government support is key to keeping them going in the long run and lowering debt.
Market Outlook: Confidence is Back
Vodafone Idea’s stock has bounced back since the Supreme Court’s comments. Experts think the window to review AGR could be a chance for a turnaround, making Vodafone Idea a risky but OK investment for people betting on India’s telecom comeback.
With Motilal Oswal saying Neutral and Citi saying High-Risk Buy, the feeling is going from just surviving to making a comeback, thanks to hopes of AGR help, debt changes, and investors trusting them again.
In Conclusion
The positive views from top brokerages show people are feeling good about Vodafone Idea’s story. As the government gets ready to review AGR debts, the market is paying close attention. Any policy help could start a strong rally.in the stock, reinforcing investor confidence and reshaping the future of India’s telecom landscape.
Note: All information and images used in this content are sourced from Google. They are used here for informational and illustrative purposes only.
Frequently Asked Questions (FAQ) on Vodafone Idea’s Upgrade and AGR Relief News
What did Motilal Oswal say about Vodafone Idea?
Motilal Oswal upgraded Vodafone Idea’s rating from “Reduce” to “Neutral” and raised the price target to ₹10 from ₹6.5, citing improved fundamentals and optimism after the Supreme Court’s AGR-related ruling.
Why did Motilal Oswal change its stance on Vodafone Idea?
Motilal Oswal revised its stance to “Neutral” due to the potential for AGR relief, which could significantly strengthen Vodafone Idea’s balance sheet and attract fresh bank lending and investor confidence.
What is Citi’s current rating on Vodafone Idea?
Citi has maintained a “High-Risk Buy” rating with a ₹10 price target, expressing faith in Vodafone Idea’s prospects if the government provides AGR-related concessions.
What prompted Citi’s optimism, and how does Motilal Oswal view it?
Citi believes the Supreme Court’s order permitting the government to reconsider Vodafone Idea’s AGR dues could have major positive implications. Motilal Oswal shares this view, noting that such relief could trigger a chain of positive events for the telecom company and its stakeholders.
What does AGR relief mean for Vodafone Idea, according to Motilal Oswal?
Motilal Oswal highlights that AGR relief could reduce cash-flow pressure, enable Vodafone Idea to secure up to ₹25,000 crore in bank debt, and improve its ability to invest in network expansion and 5G rollout.
When is Vodafone Idea expected to make the next major AGR payment?
Vodafone Idea has a large AGR payment due in March 2026, but both Motilal Oswal and Citi expect that any relief decision could come much earlier, possibly within the next few months.
How could AGR relief benefit Indus Towers?
Indus Towers, one of Vodafone Idea’s key partners, could see improved cash flow and dividend stability. Motilal Oswal believes this development could restore confidence in Indus Towers’ long-term financial outlook.
What is the government’s stake in Vodafone Idea?
The Government of India currently owns 49% of Vodafone Idea after converting a portion of its dues into equity, positioning it as a major stakeholder in the company’s revival.
What options can the government consider to support Vodafone Idea?
Analysts, including those at Motilal Oswal, see several potential steps the government could take—such as extending AGR repayment timelines, waiving penalties and interest, or correcting calculation discrepancies—to ease the company’s debt burden.
How did Vodafone Idea shares perform after the Supreme Court’s order?
Vodafone Idea shares surged nearly 10% on October 27, closing at ₹10.02 and touching an intraday high of ₹10.57 — their highest level since September 2024, indicating investor enthusiasm over potential AGR relief.
What recent fundraising efforts has Vodafone Idea undertaken?
Vodafone Idea raised ₹18,000 crore through India’s largest Follow-on Public Offer (FPO) and secured an additional ₹2,000 crore from promoters in 2024, signaling strong backing for its turnaround plans.
Why is AGR relief crucial for Vodafone Idea’s recovery, as per Motilal Oswal?
Motilal Oswal emphasizes that AGR relief would give Vodafone Idea the financial flexibility to service debt, expand networks, and sustain operations, marking a turning point in its revival story.
What does the latest upgrade mean for investors?
According to Motilal Oswal, the upgrade to “Neutral” and Citi’s “High-Risk Buy” rating reflect a shift toward cautious optimism, suggesting that Vodafone Idea could emerge stronger if government relief and fresh funding materialize.
