Vodafone Idea Share saw a strong start to the trading day as its shares surged by 9.99%, hitting the upper circuit limit. The stock reached a high of Rs 7.49, which was also its low for the day, compared to the previous closing price of Rs 6.81.
This jump comes after the Government of India announced that it would convert Rs 36,950 crore of Vodafone Idea’s unpaid dues into equity shares, significantly impacting the company’s financial structure.
Why Vodafone Idea’s Share Price is Rising
The rise in Vodafone Idea’s stock price is mainly due to the government’s decision to convert a large portion of the company’s debt into equity. This conversion means that the government’s stake in the company will increase from 22.6% to 48.99%. This move helps Vodafone Idea reduce its debt burden, providing some much-needed financial breathing room.
Even though this conversion will reduce the company’s financial pressure, Vodafone Idea still faces challenges in raising funds for expanding its 4G and 5G networks.
According to analysts, this change is a positive step, but the company will need to stabilize its subscriber base and resolve other financial issues for long-term success.
International brokerage Citi Research has raised its target price for the stock to Rs 12, while Motilal Oswal has increased its target price to Rs 6.5, reflecting the positive outlook from the equity conversion. However, the company’s future growth will depend on overcoming its financial struggles and the government’s continued support.