Vodafone Idea News: Here's what the company said on raising funds, street sees 30% downside

The Aditya Birla Group company expects capex to remain at the same level until the fund raising exercise is complete.

Debt-ridden Vodafone Idea said that it received communication from a promoter group entity promising financial support of up to Rs 2,000 crore if needed to support its payment obligations. The company's net loss at the end of the June quarter widened to Rs 7,840 crore.

However, the street remains unconvinced of the company's commentary as consensus expects a potential downside of close to 30 percent in Vodafone Idea's share price.

Brokerage firm JPMorgan said that fund raising remains elusive as talks have not yet reached the final stages. While some have moved to the due dilligence stage, nothing has been finalised yet. It expects liquidity constraints to continue impacting network investments on both 4G expansion and 5G rollout.

The brokerage further said that the key driver for the stock post equitisation of part of government debt is debt refinancing and capital infusion in the medium term.

JPMorgan has one of the lowest price targets for Vodafone Idea on the street. It has an underweight rating on the stock with a price target of Rs 3.

CLSA also has a sell rating on the stock with a price target of Rs 7. It termed the company's quarterly results to be below estimates.

Shares of Vodafone Idea have been flat this year so far, declining close to 2 percent. None of the 18 analysts that track the stock have a buy rating on it. Three have a hold recommendation, while the other 15 have recommended their clients to sell the stock.