Vodafone Idea shares are a 'high-risk' buy, Citi says after latest AGR developments

Brokerage firm Citi has called shares of Vodafone Idea Ltd. a "high-risk buy" in its latest note on Monday, September 22.

Citi's "high-risk buy" recommendation comes with a price target of ₹10, which implies a potential upside of 18% from last Friday's closing levels.

The brokerage wrote in its note that the Supreme Court has admitted Vodafone Idea's latest AGR plea and with the government also expressing its support, the chances of a potential relief for the company have increased.

Last Friday, the Supreme Court hearing on Vodafone Idea's AGR plea was deferred to Friday, September 26, but the stock saw a sharp surge as the government's stance during the hearing, led to increased prospects of a potential relief.

Vodafone Idea has argued that the AGR demand amount should be considered final but, if subject to change, the entire amount up to financial year 2017, should be reassessed and reconciled.

The government has also indicated that a solution is necessary and there should be some finality on this. The government is the largest shareholder in Vodafone Idea with a 49% stake and many government officials, including the Telecom Minister Jyotiraditya Scindia, have made it clear that the government will not increase its stake beyond 49%, turning the company into a PSU.

Only 4 out of the 22 analysts having coverage on Vodafone Idea have a "buy" rating on the stock, six say "hold", while 12 have a "sell" recommendation.

Share of Vodafone Idea ended 8% higher on Friday at ₹8.46. The stock trades below its FPO price of ₹11, and well below its 2024-peak of ₹19.