Vodafone Idea on a 3-day losing streak

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Shares of Vodafone Idea tumbled 6 percent intraday on August 28. The scrip has been trading in the red from the past two sessions.

Shares of the telecom major have been performing poorly since it came into existence after the merger of Vodafone India and Idea Cellular in 2018. Year-to-date, the stock had lost about 77 percent of its market value on the BSE.

As per the quarterly revenue data from the Telecom Regulatory Authority of India (Trai) compiled by SBICAP Securities, the company posted a sequential decline in revenues in June quarter, while competitors Bharti Airtel and Reliance Jio Infocomm reported notable expansions.

Based on adjusted gross revenues, including receipts from long-distance services, Vodafone Idea’s market share dropped from 32.1 percent in the quarter ended March 2019 to 27.8 percent in the last quarter. Two years ago, the combined market share of Vodafone India and Idea Cellular stood at 42.5 percent, the report added.

As per a report by brokerage Kotak Institutional Equities, Vodafone Idea’s debt and deferred spectrum repayment schedules, basis the company’s FY2019 annual report, suggests a need for another round of equity infusion as early as 2Q/3QFY21E unless there is a quick and steep recovery in ARPU or fibre sale closes and fetches upwards of Rs 10,000 crore or some of the debt due for repayment is refinanced or capex credit increases by a sum materially higher than the Rs 6,000 crore.

Meanwhile, media reports suggested that the company, along with Reliance Jio and Bharti Airtel, may not bid for 5G spectrum, citing high cost and limited availability of the airwaves.

It may be stated that around 1035 hours (IST), shares of Vodafone Idea traded 3.40 percent down at Rs 5.12 on BSE.

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