Citi has a price target of ₹17 for Vodafone Idea shares, with the bank pointing to funding visibility and a recovery in average revenue per user (ARPU) as the basis for its assessment.

Following a management meeting, Citi said improving subscriber trends and ARPU indicate that Vodafone Idea's network investments are beginning to translate into better customer acquisition, retention and monetisation. That reading carries weight because the operator's subscriber base has shrunk steadily since its formation, with regulator TRAI's monthly data showing consistent user losses to rivals, making any stabilisation in customer trends a notable shift for the company.

Vodafone Idea Limited (listed on the NSE and BSE under the symbol IDEA) is one of India's three large private telecom operators. It was formed through the 2018 merger of Vodafone India and Idea Cellular, and competes primarily with Reliance Jio and Bharti Airtel, which together account for the bulk of India's mobile subscriber market.

The company has operated under considerable financial strain, carrying substantial liabilities related to spectrum purchases and adjusted gross revenue (AGR) dues owed to the Indian government. In December 2024, the Supreme Court rejected Vodafone Idea's curative petition seeking a recalculation of its AGR dues, leaving the liability in place. The government converted a portion of the interest on those dues into equity, making it one of the company's largest shareholders.

To strengthen its balance sheet, Vodafone Idea raised ₹18,000 crore through a follow-on public offer (FPO) in April 2024, which was India's largest FPO at the time. The proceeds were earmarked for network expansion, including 4G coverage improvements and the rollout of 5G services. Beyond the FPO, the company has said it also plans to raise additional bank debt to fund its network plans — the funding visibility Citi now refers to. Promoters Aditya Birla Group and Vodafone Group added a further ₹2,075 crore through a preferential share issue in March 2025.

In March 2025, Vodafone Idea launched commercial 5G services, starting in Mumbai, becoming the last of India's three private operators to do so after Reliance Jio and Bharti Airtel began their 5G rollouts in October 2022 — a gap the company's current network spending is aimed at closing.

ARPU, a closely watched metric in the telecom industry that measures the average monthly revenue generated per subscriber, has risen across India's telecom sector following the tariff increases implemented by the country's major operators in July 2024. Even so, quarterly results have shown Vodafone Idea's ARPU continuing to trail the levels reported by Jio and Airtel, which frames the recovery thesis Citi outlines.

Source: CNBC-TV18

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