Why Vodafone Idea shares soared 10%; CLSA, Citi targets
CLSA in a note on May 3 said even as Vodafone Idea's reassessed AGR dues are lower by only 27 per cent, this combined with the payment moratorium is definitive long-term relief.
- May 4, 2026,
- Updated May 4, 2026 1:49 PM IST
Vodafone Idea Ltd climbed 10 per cent in Monday’s trade after a couple of brokerages turned positive on the stock following the telecom operator’s Adjusted Gross Revenue reassessment, which lowered its dues from Rs 87,695 crore to Rs 64,046 crore. The AGR relief is expected to improve prospects for the planned fundraising, they said, adding that a tariff hike remains a key catalyst for the stock.
CLSA in a note on May 3 said even as Vodafone Idea's reassessed AGR dues are lower by only 27 per cent, this combined with the payment moratorium is definitive long-term relief. This, it said, will boost the prospects of management’s planned fundraising for Rs 45,000 crore investment plan.
With reassessed AGR dues, which are yet pending payments, mainly over FY36-FY41, CLSA still factors in AGR dues in Vodafone Idea's stock valuation. "We retain O-PF and our target price of Rs 11, as we roll forward but use a higher 11 times EV/ Ebitda (previously 10x) given AGR relief," the foreign brokerage said.
Shares of Vodafone Idea soared 9.98 per cent to hit a high of Rs 11.24. The stock cut gains and was later trading at 10.44, still up 2.15 per cent.
A minimum of Rs100 crore is to be paid annually by Vodafone Idea over FY32-35,and the remaining AGR dues will be paid in equal instalments of Rs 10,600 crore annually over FY36-41. Beyond AGR, Vodafone's spectrum debt is massive at Rs 1,24,900 crore. CLSA noted that the government converted Rs 37,000 crore of spectrum debt to equity in April 2025, increasing its shareholding to 49 per cent.
Citi has called Vodafone Idea Ltd a high-risk buy idea with a target price of Rs 14. This brokerage said the chapter of regulatory uncertainty is now largely behind Vodafone Idea and that the telecom operator is better positioned to close its pending Rs 25,000 crore bank debt raise.
This would, in turn, enable VIL to commence execution of its Rs 45,000 crore three-year capex plan that was outlined by the company management in the January strategy update. A closure of the debt funding will therefore now be key to monitor, Citi said.
"We await further clarity from the company on the accounting treatment of the reassessed AGR dues given the absence of interest accrual. Notwithstanding this, we incorporate the NPV savings from the AGR reassessment into our valuation. We also adjust our forecasts to reflect our assumption of a delayed tariff hike, consistent with our recently-modified Bharti estimates. We also lower our target EV/Ebitda multiple by a notch to 12x, maintaining a discount to Bharti," Citi said.
Vodafone Idea Ltd climbed 10 per cent in Monday’s trade after a couple of brokerages turned positive on the stock following the telecom operator’s Adjusted Gross Revenue reassessment, which lowered its dues from Rs 87,695 crore to Rs 64,046 crore. The AGR relief is expected to improve prospects for the planned fundraising, they said, adding that a tariff hike remains a key catalyst for the stock.
CLSA in a note on May 3 said even as Vodafone Idea's reassessed AGR dues are lower by only 27 per cent, this combined with the payment moratorium is definitive long-term relief. This, it said, will boost the prospects of management’s planned fundraising for Rs 45,000 crore investment plan.
With reassessed AGR dues, which are yet pending payments, mainly over FY36-FY41, CLSA still factors in AGR dues in Vodafone Idea's stock valuation. "We retain O-PF and our target price of Rs 11, as we roll forward but use a higher 11 times EV/ Ebitda (previously 10x) given AGR relief," the foreign brokerage said.
Shares of Vodafone Idea soared 9.98 per cent to hit a high of Rs 11.24. The stock cut gains and was later trading at 10.44, still up 2.15 per cent.
A minimum of Rs100 crore is to be paid annually by Vodafone Idea over FY32-35,and the remaining AGR dues will be paid in equal instalments of Rs 10,600 crore annually over FY36-41. Beyond AGR, Vodafone's spectrum debt is massive at Rs 1,24,900 crore. CLSA noted that the government converted Rs 37,000 crore of spectrum debt to equity in April 2025, increasing its shareholding to 49 per cent.
Citi has called Vodafone Idea Ltd a high-risk buy idea with a target price of Rs 14. This brokerage said the chapter of regulatory uncertainty is now largely behind Vodafone Idea and that the telecom operator is better positioned to close its pending Rs 25,000 crore bank debt raise.
This would, in turn, enable VIL to commence execution of its Rs 45,000 crore three-year capex plan that was outlined by the company management in the January strategy update. A closure of the debt funding will therefore now be key to monitor, Citi said.
"We await further clarity from the company on the accounting treatment of the reassessed AGR dues given the absence of interest accrual. Notwithstanding this, we incorporate the NPV savings from the AGR reassessment into our valuation. We also adjust our forecasts to reflect our assumption of a delayed tariff hike, consistent with our recently-modified Bharti estimates. We also lower our target EV/Ebitda multiple by a notch to 12x, maintaining a discount to Bharti," Citi said.