Vodafone Idea's Share Price Rockets As Credit Agency Hikes Debt Rating

Vodafone Idea shares were surging on Wednesday after rating agency CARE Ratings upgraded the company’s Long Term Bank Facilities.

What Happened: The credit agency raised the telco’s debt rating from B+ to BB+, maintaining a stable outlook, while its short-term bank facilities were also upgraded from A4 to A4+.

The market is also anticipating an industry-wide increase in tariffs, which could help improve the debt-ridden firm’s balance sheet.

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Additionally, the extension of the moratorium beyond FY26 and FY27 or a partial equity conversion of government dues depending on Vodafone Idea's evolving liquidity position could prop the firm up, according to JM Financial.

Vodafone Idea's average revenue per user (ARPU) rose 0.7% sequentially to ₹146 in Q4 FY24, mainly due to increased pricing of entry-level plans in some markets and the addition of 4G data subscribers.

For the March quarter, Vodafone Idea's net loss widened to ₹7,675 crore from ₹6,986 crore in the previous quarter, which had seen an exceptional gain. The telco continues to be burdened by high debt and customer losses.

Operationally, the joint venture between the UK's Vodafone Group Plc and India's Aditya Birla Group showed improvement, reporting its highest-ever quarterly EBITDA of ₹2,180 crore post the 2018 merger.

Price Action: Vodafone Idea’s share price ended the session on Wednesday 13.3% higher at ₹14.95.

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