Vodafone Idea Rated a ‘High-Risk Buy’ by Citi; Shares May Rally 67%

Vodafone Idea (VI) saw a positive move on April 15 as its shares rose nearly 4% in early trade, following a report by global brokerage firm Citi Research, which maintained a ‘buy’ rating on the stock. The optimism comes despite the company being categorized as a high-risk investment.

Citi Research maintains a target price of ₹12

In its latest note, Citi Research reaffirmed its target price of ₹12 for Vodafone Idea, suggesting a potential upside of approximately 67% from its previous close. At 11 AM, the stock was trading at ₹7.32 on the NSE, up by 2%.

“Vodafone Idea remains a high-risk buy, but there is potential for a strong rally,” Citi said in its note.

The market reacted positively to the reaffirmation, with investor sentiment boosted by signs of renewed institutional confidence.

Government converts dues into equity

Another key factor influencing the sentiment around Vodafone Idea is the recent conversion of spectrum dues worth ₹3,700 crore into equity by the Government of India. This move significantly alters the company’s shareholding structure.

As a result, the government’s stake in Vodafone Idea will jump from 22.6% to 48.99%. Despite this large shareholding, the promoters will retain operational control of the telecom operator, according to the company’s filing with stock exchanges.

“The increase in government stake reflects a supportive stance, but strategic decisions will still be driven by the existing promoters,” the filing noted.

High-risk, but with potential

While the label of ‘high-risk buy’ implies caution, analysts believe that the combination of government backing and brokerage confidence could help revive investor interest in Vodafone Idea. The company has faced persistent financial and competitive challenges but remains a key player in India’s telecom sector.

What’s next for investors?

With the government stepping in as a near-majority stakeholder and brokerage firms seeing upside potential, Vodafone Idea’s share price movement may continue to be in focus in the coming sessions. However, the high-risk nature of the stock means that investors should remain cautious while weighing opportunities.