Vodafone Idea shares slip; can Vi survive Jio-Airtel dominance? Here's what brokerages say

Shares of Vodafone Idea slipped in Wednesday's trade as investor concerns persisted over the company’s competitive position and funding visibility, even as global brokerage CLSA maintained an accumulate rating on the stock with a target price of Rs 11, against a current market price of around Rs 10.

In a broader sector note, CLSA said India’s mobile telecom industry recorded a 3 per cent quarter-on-quarter rise in revenue to nearly Rs 3 lakh crore, supported by steady tariff realisations and rising data consumption.

Jio, Airtel consolidate dominance

The brokerage highlighted the continued dominance of the top two private players. Reliance Jio gained 47 basis points of market share quarter-on-quarter to 42.5 per cent, while Bharti Airtel saw a marginal 3 basis points decline to 39.5 per cent.

Together, Reliance Jio and Bharti Airtel account for nearly 82 per cent of the sector’s total revenue, reinforcing the widening gap with Vodafone Idea.

Vodafone Idea loses further market share

CLSA noted that Vodafone Idea lost 25 basis points of market share quarter-on-quarter, taking its share down to 13.1 per cent, as competitive intensity and network investments by peers continue to weigh on the company’s performance.

Fund-raising remains critical amid AGR backdrop

According to CLSA, a key monitorable for Vodafone Idea will be its planned fund-raising of around $5 billion, particularly in the backdrop of recent adjusted gross revenue (AGR) developments. Sources said the government is examining telecom-related issues in line with directions of the Supreme Court of India, and any further representations by telecom operators would need to follow the same legal route.

Officials added that Vodafone Idea will need to firm up and execute its business plan, while a committee continues to work on AGR-related matters.

Capex gap raises concern

Shares of Vodafone Idea also came under pressure after analysts flagged concerns over the company’s planned Rs 45,000-crore capital expenditure over the next three to four years. According to HSBC Global Investment Research, the proposed investment is significantly lower than the expected Rs 1.2–1.4 trillion spending by rivals Reliance Jio and Bharti Airtel over a similar period.

HSBC said the funding gap could limit Vodafone Idea’s ability to expand coverage, accelerate its 5G rollout and regain lost market share.

Long-term obligations add to overhang

The brokerage also pointed out that Vodafone Idea will face spectrum renewals starting from 2030, which would entail additional capital investment. “Thus, we think Vi remains strategically aligned with other industry players to improve data monetisation and raise tariffs,” HSBC said.

Stock under pressure

Vodafone Idea shares have fallen about 15.1 per cent from their December high of Rs 12.80, reflecting sustained investor concerns over funding visibility, balance-sheet strength and intensifying competition, even as some brokerages see limited upside if fund-raising plans materialise.