Voda Idea shares jump over 11% on UBS upgrade
Mumbai: Shares of Vodafone Idea soared as much as 11.6% in trading on Friday after brokerage UBS upgraded its rating on the stock to 'buy' from 'neutral'. The brokerage raised its price target on the stock to ₹18, implying an upside of over 19% from Friday's closing. The stock ended at ₹15.11, up 7.5% over the previous day.
UBS said it believes the market is pricing in 15-20% mobile tariff increase over the next 12-24 months. «We believe relief in the form of AGR reduction by the Supreme Court or equity conversion, moratoriums etc by the government is highly likely, especially given the government's stated objective of ensuring three viable private telcos,» the brokerage said in a note. UBS said Vodafone will benefit the most if that happens and the risk-reward is attractive before such an announcement. The brokerage maintained its 'neutral' ratings on Bharti Airtel and Indus Towers.
Analysts and investors have been bullish on Vodafone since its ₹18,000-crore follow-on public offer (FPO), India's biggest, in April. The issue was subscribed 7 times, with strong demand from global institutional investors. Vodafone Idea, formed by the merger of the Aditya Birla Group's Idea Cellular and the India unit of Vodafone Plc in 2018, had priced the issue at ₹10-11 a share.
