Motilal Oswal Upgrades Vodafone Idea; Citi Sees “High-Risk Buy”
Vodafone Idea’s shares are back in the spotlight as major brokerages revise their ratings. Motilal Oswal has upgraded the stock to “neutral,” while Citi continues to see it as a “high-risk buy,” citing potential government relief in adjusted gross revenue (AGR) dues that could turn the tide for the telecom operator.
10:23 AM Oct 28, 2025 IST
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Aakash Khuman
Motilal Oswal has raised its rating on Vodafone Idea Ltd. from “reduce” to “neutral” and increased the price target from Rs.6.5 to Rs.10. The upgrade came on October 28, signaling renewed optimism after recent developments around the company’s AGR dues. Meanwhile, Citi maintained its “high-risk buy” rating with a similar Rs.10 target. This follows the Supreme Court’s observation allowing the government to reconsider Vodafone Idea’s grievances regarding its long-standing AGR dues—seen as a potential game-changer for the debt-laden telecom operator.
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AGR Relief Prospects
According to Citi, the Supreme Court’s order empowers the Government of India to revisit issues tied to AGR liabilities, a move that could have “significant positive ramifications” for both Vodafone Idea and Indus Towers. The brokerage anticipates that, since a large AGR payment is due by March 2026, any relief measures could be announced well before that deadline—possibly within the next few months. For Indus Towers, Citi has reiterated a “Buy” rating with a target of ₹460, banking on Vodafone’s stability to drive network growth.
Investor Confidence Boost
Citi believes that AGR relief could improve Vodafone Idea’s creditworthiness, giving banks confidence to lend more. This would address ongoing concerns about delayed bank financing for its network expansion. With the stock trading near the crucial ₹10 mark, potential relief could also open the door for another equity raise, which may reduce the government’s current 49% stake and allow conversion of additional dues into equity. Such a move could trigger a positive domino effect—strengthening Vodafone Idea’s balance sheet and restoring Indus Towers’ dividend payouts.
Market Reaction
Shares of Vodafone Idea surged nearly 10% on October 27, after the Supreme Court noted that the Centre can reconsider the company’s AGR dues. The court emphasized that this permission was specific to Vodafone’s unique circumstances, given its large subscriber base of 20 crore and the government’s significant equity holding. By the end of the next trading session, the stock closed at ₹10.02—its highest level since September 2024—marking a strong rebound for the telco.
Government’s Possible Moves
Experts suggest several routes the government could explore to support Vodafone Idea’s revival:
- Extending the AGR repayment deadline beyond March 2031.
- Waiving up to 50% interest and 100% penalties.
- Correcting earlier calculation discrepancies in AGR dues.
Solicitor General Tushar Mehta clarified that while the government won’t recompute dues, it could propose a practical solution—pending Supreme Court approval.
Why Relief Is Critical
Analysts stress that any AGR-related relief could ease Vodafone Idea’s cash flow and help it secure up to Rs.25,000 crore in bank funding. The company recently raised Rs.18,000 crore through India’s largest Follow-on Public Offer (FPO) and received Rs.2,000 crore in promoter support in 2024. However, the road ahead remains uncertain for rival telcos seeking similar concessions.
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