Vodafone Idea shares reach yearly high following HDFC Bank loan

Shares of Vodafone (NASDAQ:) Idea (NSE:VODA) hit a yearly high of Rs 13.85 on Thursday, following the company’s acquisition of a two-year loan worth Rs 2,000 crore from HDFC Bank, India’s largest private sector lender. The funds, aimed at covering pending license fees and 5G spectrum commitments, were disbursed in mid-September, ahead of some statutory payment deadlines.

As a result of this financial boost, VI has successfully paid over Rs 350 crore towards past license fees and about Rs 1,700 crore for spectrum usage charges for the fiscal years 2022 and 2023. Despite reporting a gross debt of Rs 2.11 lakh crore as of June 30, 2023, VI has cleared all statutory dues up until the second quarter of the fiscal year 2022-23 and is now focusing on third quarter dues.

In addition to the loan from HDFC Bank, VI’s Chief Executive Akshaya Moondra confirmed an additional Rs 2,000 crore investment from promoters. This additional funding is expected to help settle spectrum dues by the end of March, alongside external investments.

While VI reported a net loss of Rs 8,737.9 crore in the July-September quarter, the company experienced a slight revenue increase to Rs 10,716.3 crore and EBITDA reached Rs 4,282.8 crore with a margin expansion to 40%. The company is currently in discussions with network vendors to finalize its rollout strategy and is also seeking further equity funding from potential investors.

VI shares closed 8.20% higher at Rs 13.85 on NSE on Thursday.

InvestingPro Insights

Vodafone Idea has shown a strong performance with a significant return over the past week and the last three months, as per the InvestingPro Tips. The company’s valuation implies a robust free cash flow yield, making it a prominent player in the Wireless Telecommunication Services industry. However, it’s worth noting that VODA’s revenue growth has been slowing down recently, and the company operates with a poor return on assets.

In terms of real-time metrics, VODA’s Market Cap stands at 665.2M USD, with a P/E Ratio of 37.2. As of Q4 2023, the company has reported a Revenue of 459.05M USD, showing a growth of 10.5% in the last twelve months. The company’s Gross Profit Margin stands at 61.35%, indicating a healthy profitability.

It’s important to note that InvestingPro provides many more insights and tips for investors. For example, there are 12 additional InvestingPro Tips available for VODA, which could provide further valuable insights into the company’s performance and potential.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.