On July 14, 2025, Vodafone Idea's share experienced a surge. The share opened at ₹7.17 and recorded a rise of approximately 7% during the day. According to market discussions and analyst reports, several key reasons are behind this surge, the most significant being the expectation of potential government support and the consistent buying by domestic investors.
UBS Downgrades Rating, But Increases Target
In UBS's latest report, the company's rating has been maintained at Neutral, down from its previous Buy rating. However, interestingly, UBS has increased the share's target price to ₹8.50. This indicates a potential profit of approximately 20% based on the current price.
The report states that Vodafone Idea's EV/EBITDA multiple is at 11x, based on the estimated EBITDA for the fiscal year 2027, which is considered expensive for this sector. Also, the picture regarding the government's relief to the company is still not entirely clear.
Market Enthusiasm Fueled by Expectations of Government Aid
There is an expectation in the market regarding Vodafone Idea that the central government, under its policy of supporting all three private telecom companies, may provide some form of relief to Vodafone Idea. Earlier this year, the government increased its stake in the company to 48.99% in exchange for outstanding spectrum dues of ₹36,950 crore.
This step indicated that the government does not want Vodafone Idea to fail. Now, investors are awaiting the announcement of the next potential relief or funding, which has intensified the demand for the share in recent times.
FIIs Selling, DIIs Buying Aggressively
According to data released by the exchange, the holdings of Foreign Institutional Investors (FIIs) decreased to 6.56% in April 2025, down from 10.11% in the previous quarter. On the other hand, Domestic Institutional Investors (DIIs) have taken advantage of this decline and increased their stake from 27.53% to 52.42%.
Furthermore, public holdings have also decreased to 11.65% from 17.75%. These figures clearly indicate that the share has transitioned from weak hands to b hands in the market.
Delay in Funding Remains the Biggest Hurdle
Vodafone Idea's biggest challenge currently remains related to funding. The company had earlier stated that it was planning to raise significant capital from external investors, but no concrete announcement has been made yet. This delay in funding has also pushed back the company's plans for network expansion and the launch of 5G services.
Analysts believe that until the company raises new capital, it will continue to lag behind companies like Reliance Jio and Bharti Airtel in competition.
Continuous Decline in Market Share
Vodafone Idea's market share is continuously declining amidst the ongoing competition in the telecom sector. Over the past few years, a large number of users have shifted to Jio and Airtel. The lack of investment in the company's services and complaints related to network quality have disappointed customers.
However, analysts believe that if the company secures funding and improves its network, it can regain its foothold in the market.
A Trading Favorite for Small Investors
Vodafone Idea's share is quite popular among small investors because its price remains in single digits. Traders repeatedly enter this stock, seeing the opportunity to buy at a low price. Every time there is positive news, the share experiences a surge.
The surge on July 14 was also part of this trend, where the share jumped 7% due to expectations of government relief and analyst reports.
Company Lagging in 5G and Network Expansion
While 5G services are rapidly expanding in India, Vodafone Idea still appears to be far from these services. While Jio and Airtel are engaged in 5G network expansion across the country, Vodafone Idea has no concrete progress in this direction. The company has only initiated 5G trials in limited cities, but its expansion across the country remains a challenge due to limited funding.
