Vodafone Idea Has Become Speculative Stock, Needs Near-Term Fundraise: Centrum Broking's Piyush Pandey

Vodafone Idea, one of India’s major telecom operators, continues to grapple with a precarious financial situation as it faces significant debt, customer attrition and the looming dominance of rivals Bharti Airtel and Reliance Jio, according to Piyush Pandey, Telecom Analyst at Centrum Broking.

“It has become sort of like a speculative stock. Concerns remain regarding loss of customer base, debt remains very high and they need to do a significant part of the 4G-5G capex. They need to raise funds from the banks and other investors to complete the remaining part of the capex,” he said during a conversation with NDTV Profit on Tuesday.  

According to Pandey, a successful turnaround for Vodafone Idea hinges on two critical factors: a substantial, near-term fundraise and a supportive relief package from the government.

“In the absence of a near-term fundraise, along with some help from the government, the situation remains somewhat precarious. If it doesn't happen, then it might just remain at the current Rs 7 to Rs 8 (per share) levels,” he noted.

The Indian telecom landscape has currently become a duopoly, with the dominance of Bharti Airtel and Jio, according to Pandey.  

“The sector has become sort of like a duopoly with Bharti Airtel and Jio, and Vodafone is sort of struggling, losing markets here,” he said.

However, Pandey noted that the gap between Vodafone Idea and the top two players has narrowed compared to two or three years ago. 

“The company has reached a stage where any significant fundraiser, any help can literally change its condition,” he said.

Commenting on Indus Towers, a key player in the telecom infrastructure space, Pandey noted that the company, one of the two major players alongside Brookfield, is likely prioritising growth through acquisitions over announcing a dividend policy.

“They might announce a dividend towards the end of FY26,” he said. 

Pandey said that a tariff hike is "very likely” in the industry.   He predicted that the next round of tariff hikes would likely focus on higher-end plans, with minimal increases for voice-only or lower-tier plans.

He added that both Bharti Airtel and Vodafone Idea have argued that India's data pricing structure is distorted.

“People who are consuming 30-40 GB per month, I think they might see more increase in percentage terms,” he said.

Shares of Vodafone Idea closed 9.05% lower at Rs 6.73 apiece on the NSE on Tuesday, while the benchmark Nifty50 ended at 24,712.05, down 1.02%.