Vodafone Idea Shares Fall 7% in Two Days as HDFC Securities Sees Buy Opportunity With 25% Rally

Shares of Vodafone Idea Ltd (Vi) fell by 3.45% today, and is trading at Rs. 9.23 after falling 4% yesterday, as reports emerged that JSW Group chairman Sajjan Jindal is exploring a potential investment in the financially stressed telecom operator, according to sources familiar with the matter.The discussions are exploratory, with no formal proposal or transaction structure finalized.

The potential interest comes as the Indian government, currently the largest shareholder with a 48.99% stake, seeks a financially strong strategic investor to inject capital and help steer the company’s turnaround. Officials are concerned that the collapse of Vodafone Idea could leave India’s telecom sector dominated by just two private operators — Reliance Jio and Bharti Airtel — raising competition concerns in one of the world’s largest telecom markets. Analysts say the company’s revival has been constrained by modest capital infusion from existing promoters in recent years, even as it struggles with regulatory liabilities and network investment requirements.

One potential structure being examined could involve Vodafone Idea issuing fresh shares to entities linked to the JSW Group, allowing the conglomerate to become a significant shareholder. New share issuance would dilute government and existing promoter stakes, giving the new investor a strong foothold. According to exchange filings, the Government of India holds about 48.99% of Vodafone Idea, the promoter group — Aditya Birla Group and Vodafone Plc — holds roughly 25.57%, and the remaining shares are publicly held.

Investor Outlook – According to a report by HDFC Securities, the government’s recent relief to Vodafone Idea on AGR dues, the possibility of a fresh capital raise, expectations of another round of tariff hikes, and a planned capex of ₹50,000–55,000 crore, combined with its "deeply depressed stock valuation," present a "compelling, albeit speculative, high-risk, high-reward entry point" for investors seeking exposure to India’s telecom sector. The brokerage has recommended a 'Buy' and add on dips in the ₹8–₹9 range, with a target price of ₹12, which could be achieved over the next four quarters, implying a potential upside of around 25% from Thursday's close of ₹9.58.