Call waiting: How Vodafone Idea can claw its way back

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₹12.91 apiece. Even when it has been working overtime to get its act together—by raising more than $2 billion, for instance—it just doesn’t seem to be enough. The stock’s plunge on Friday was prompted by a gloomy report by the equities research wing of Goldman Sachs’ brokerage arm in India, which predicted an 83% downside for Vi shares from the previous day’s close.

It maintained a ‘Sell’ rating on the company and raised the target price marginally to ₹2.5 apiece from ₹2.2 earlier. The report emphasized that Vi’s recent capital raise, while positive, was unlikely to arrest its market share erosion. Vi had raised ₹18,000 crore ($2.16 billion) back in April through a follow-on public offer (FPO).

Incidentally, one of the anchor investors in the FPO was the Singapore arm of Goldman Sachs. In addition, the telecom company’s promoters have put in ₹2,075 crore in additional equity. The company also plans to raise more debt.

Vi is in discussions with a clutch of public sector banks, led by State Bank of India (SBI) and Punjab National Bank (PNB), to raise ₹25,000 crore in fund-based or term loans, and ₹10,000 crore via non-fund based facilities or bank guarantees. Separately, some of Vi’s dues to technology vendors Nokia and Ericsson have been converted into equity; past dues of American Tower Corp have also been converted to equity, while the arrears due to Indus Towers are being serviced by a payment plan. Despite all this, however, the telecom operator continues to bleed and lose market share to its deeper-pocketed rivals, Reliance Jio and Bharti Airtel.