Vodafone Idea gains over 6% amid reports of DoT asking telco to pay bank guarantee by March 10; Citi maintains 'buy'

Vodafone Idea (VIL) shares in Thursday's morning deals (February 13, 2025) gained up to 6.3 per cent at the day's high to Rs 8.94 on the BSE. The gains in the stock are triggered after foreign brokerage Citi has continued with its 'buy' call on the stock with the target slashed to Rs 12 from the earlier Rs 13. The new revised target implies potential gains of 43 per cent from the previous close of Rs 8.41 per share.

The brokerage pointed out that in the near term, it is important to keep an eye on the Rs 5,500 crore cash payment that is due to the government by March 10. Network investments, on the other hand, are still increasing at the telco, with benefits anticipated starting in 4Q, it added.

Meanwhile, as per reports the Department of Telecommunications (DoT) has asked VIL to provide a bank guarantee (BG) of Rs 6,091 crore for 1 year and the deadline for the same is kept as March 10. 

A one-time payment shortfall for spectrum purchased after 2015 is intended to be covered by this bank guarantee. In addition, the beleaguered telecom operator has been given the choice to either pay Rs 5,493 crore for spectrum dues from 2015 in cash or pay the full bank guarantee.

Nonetheless, the telco has to choose between the two options and comply with the directive of the Department of Telecommunications.

Vodafone Idea Q3FY25 results

For the December quarter, the company's net loss narrowed to Rs 6,609.3 crore as against Rs 7,175.9 crore in the preceding quarter. Also, led by a hike in average revenue per user (ARPU), the company's topline rose 1.7 per cent quarter-on-quarter (QoQ) to Rs 11,117.3 crore from Rs 10,932.2 crore in Q2FY25.

Vodafone Idea share price performance

In the last one year, the stock has tanked 40 per cent, while on a year-to-date (YTD) basis Vodafone Idea scrip has gained over 11 per cent.