Shares of Vodafone Idea in trade on December 1, 2021 spurted by as much as 19.91 percent as against the previous closing of Rs. 11.05 to day's high price of Rs. 13.25 apiece on the NSE. Considering the current price trajectory, the stock is very close to its 52-week high price of Rs. 13.8 per share scaled on January 15, 2021.
There have been seen ongoing gains in the scrip of Vodafone Idea on the back of heavy volumes since the time the company has hiked its prepaid tariff pricing by 20-25 percent effective from November 25, 2021. From November 24, 2021 closing price of Rs. 11, the stock has gained by close to 15 percent in just 5 sessions.
The company's price hike of 25% in the case of voice plan for 2G services and between 20-22% for the rest of the services shall aid the company's ARPU to improve and also help it to somewhat mitigate the ongoing financial distress at the telco.
With the price hike in tariff plans by Vodafone, investor sentiment is also expected to get a boost. Also, it will enable the company to complete its fund raising programme by the end of this fiscal year.
In its report dated November 17, 2021, brokerage firm while keeping target price on the scrip of Vodafone Idea under review said that " We highlight that recent government relief measures would ensure survival of VIL. However, staying competitive will be a function of how quickly it raises funds or takes tariff hike. We now put our ratings/target price under review till clarity emerges on fund raise".
For the stock to the perform, the brokerage listed out primarily two triggers -Major tariff hike or floor tariff implementation and substantial fundraise to meet debt repayments and capital spends
The scrip settled at a price of Rs. 12.80, up 15.84 percent on the NSE, while on the BSE after climbing 14.18%, the stock settled at a price of Rs. 12.64 apiece.