Voda Idea soars 10% as Kumar Mangalam Birla rejoins board after two years

Birla's re-appointment on the board signals the group's commitment to the company as it continues its efforts to find an investor.

Shares of Vodafone Idea (Vi) soared 10 per cent to Rs 6.65 on the BSE in Friday’s intra-day trade amid heavy volumes after the company announced re-appointment of Kumar Mangalam Birla, as an additional director (non-executive and non-independent) with effect from April 20, 2023. It also accepted the resignation of non-executive director K K Maheshwari from the board.

Birla had stepped down from the post of non-executive chairman of the company in August 2021 barely two months after offering his entire stake to a public sector or a domestic finance company.

According to Business Standard report, Birla’s appointment on the board signals the group’s commitment to the company as it continues its efforts to find an investor. The company which is yet to clear vendor dues has also been in talks with banks for raising fresh capital. Raising funds is crucial for the company to make fresh network investments and arrest subscriber loss. The company also continues to bleed and in Q3FY23 posted a net loss of Rs 7,990 crore. CLICK HERE FOR FULL REPORT
 

At 10:09 AM; Vi quoted 8 per cent higher at Rs 6.55, as compared to 0.01 per cent decline in the S&P BSE Sensex. The average trading volumes at the counter jumped 1.5 times, with a combined 180 million equity shares changing hands on the NSE and BSE. The stock hit a 52-week low of Rs 5.70 on March 31, 2023. It has corrected 44 per cent from its 52-week high of Rs 10.23, touched on May 31, 2022.

Meanwhile, analyst at ICICI Securities builds in monthly average revenue per user (ARPU) growth of ~1 per cent quarter-on-quarter (QoQ) at Rs 136. The brokerage firm expects churn for Vodafone Idea to remain elevated, with ~4 million customer exits likely in January-March quarter (Q4).

“We expect overall revenues to be down 1 per cent QoQ at Rs 10,519 crore. EBITDA at Rs 4,072 crore is expected to be down 2.6 per cent QoQ owing to negative operating leverage. Reported margins are expected at 38.7 per cent, down 70 bps QoQ. The company is expected to post a net loss of Rs 7,960 crore,” the brokerage firm said in its result preview. The fund raise, 5G launch plan, capex commentary and ARPU trajectory ahead are keys to monitorable.