The stock pared intra-day gains to settle 12.71 per cent higher at Rs 6.56 a share on BSE. Earlier in the day, it had risen as much as 34.90 per cent to Rs 7.85 a share.
The stock is still up 55.82 per cent for last one month, significantly outperforming benchmark Sensex, which is down 0.9 per cent over the same period.
On Thursday, Financial Times had reported that Google is looking to buy a 5 per cent stake in the company, driving its stock through the roof in early trade on Friday.
“As part of corporate strategy, the Company constantly evaluates various opportunities for enhancing the stakeholders’ value,” the company said in a release on Friday afternoon. “Currently, there is no proposal as reported by the media that is being considered at the board,” it said.
Even as the stock surged in Friday’s trade, analysts were still not upbeat about the prospects for telecom firm.
In a note issued before Vodafone Idea’s clarification, Credit Suisse argued that Google’s 5 per cent investment, even if materialises, would be inadequate to solve the debt problems at Vodafone Idea.
“While Google’s investment into VIL would be incrementally positive, we do the not think a 5% stake would provide any meaningful relief to VIL’s debt problems,” Credit Suisse said in a note, adding that the telco would need sizeable investment to remain a going concern.
The telecom giant that emerged after the merger of Vodafone and Idea has been asked to pay Rs 58,000 crore by the Department of Telecommunications.
The company’s self-assessment put the adjusted gross revenue (AGR) dues at Rs 21,533 crore of which the company had paid Rs 6,500 crore till the middle of March. “We think unless Google (or any other external investor) looks to acquire a controlling stake in VIL, the chances of the company’s longer-term survival beyond FY23 (when the moratorium on deferred spectrum debt ends) appear to be low,” the brokerage said .
The brokerage maintained its preference for Bharti Airtel, as it finds it well-positioned to benefit from the improving sectoral dynamics led by the improvement in mobile pricing.
“My take is that to play telecom, I would go with the stronger players where the balance sheet strength is visible i.e. Bharti Airtel, and second preference would be Reliance Jio,” said Paras Bothra, President of Equity Research, Ashika Stock Broking.
