Vodafone Idea surges 6% on Vodafone Group settlement deal
Vodafone Idea's shares rose 6% after reaching a settlement with Vodafone Group regarding contingent liability adjustment mechanism (CLAM) dues.Summary
Vodafone Idea's stock experienced a 6.13% increase, reaching ₹11.42 on Thursday, following a revised agreement with Vodafone Group promoters to settle ₹6,394 crore in contingent liability adjustment mechanism (CLAM) dues. The settlement involves approximately ₹5,836 crore, comprised of ₹2,307 crore in cash over 12 months and 3.28 billion shares valued at ₹3,529 crore. While Vodafone Group had previously paid ₹1,975 crore of the original ₹8,369 crore CLAM amount, analysts remain cautious. Axis Capital maintains a 'Reduce' rating with a target price of ₹9.45, citing the company’s debt and capital expenditure issues, and Emkay retains a 'Sell' rating with a ₹6 target, noting insufficient EBITDA to cover obligations. Despite the settlement providing temporary relief, Vodafone Idea's financial position remains stressed due to substantial debt and market competition.
(Source：The Hindu - Business Line)