Vodafone idea trying to rediscover itself

Finally applied through offline process using ASBA

Any one tracking this, when is the allotment due?

It was mentioned around May 6th allotment will happen

Allottment is done, though the strategy for applying for big numbers has’nt borne fruit. only 20-30% more than the shares entiteled for have been given. Can check the status below:
http://www.bigshareonline.com/RightsIssueApplicationStatus.aspx

Instead of looking at the price of stock, please look at the business and see how they can continue to make interest payments and still manage future capex.

Agreed that business environment is tough and JIO continue to get subscribers.

But

  1. How long JIO can continue with it’s strategy? Many says with RIL backing, it can continue for long time. But I belive that can happen for long time because RIL debt itself is very high(recently downgraded by credit sussie) and JIO heading for IPO, they need to show profits.

  2. Monopoly or duopoly won’t be permitted by government. If only JIO and Airtel remains, that will lead to duopoly which unlikely to be supported by government.

  3. Aditya Birla Group and Vodafone reputation
    Both being prominent business group, I doubt they allow business to go bankrupt.

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In April 2015 Idea Cellular Limited’s price touched Rs. 200
In Feb 2016 Idea Cellular Limited’s price touched Rs. 100
In Oct 2016 Idea Cellular Limited’s price went below IPO price of 75
In Aug 2018 Idea Cellular Limited price touched Rs. 50
In Aug 2018 Idea Cellular merges with Vodafone and name changed to Vodafone Idea
In Aug 2018 After the merger Vodafone is India’s No. 1 telco by customer market share – over 40% – and revenue market share – over 35%.
In March 2019 Vodafone Idea price touched Rs. 25
In May 2019 Vodafone Idea price touched Rs. 12
In Aug 2019 Vodafone Idea price touched Rs. 6
In Sept 2019 Vodafone Idea revenue share has now narrowed to 28% and the company has slipped to No. 3.
Today Vodafone Idea price touched Rs. 3

It needs to grow 2500% to touch its IPO price of 75
It needs to grow 6600% to touch its all time high

It has to double five times to reach its IPO price
It has to double six times to reach its all time high

Vodafone Idea’s Equity Share Capital is 28,735 cr. Which is highest among all listed companies in India

Vodafone Idea’s market capitalisation is less than 11000 crores

There are more than 200 companies in India whose market capitalisation more than Vodafone Idea

Equity Share Capital of Bharati Airtel is 2565 cr.
Equity Share Capital of Reliance Industries is 6339 cr.

Only two other Companies - GTL Infra and NHPC apart from Vodafone Idea has equity capital of more than 10000 cr.

There are 16 listed Companies whose equity share capital is more than 5000 cr.
Out of these sixteen companies, in case of 4 companies, market capitalisation os less than share capital : Vodafone Idea, GTL Infra., United Bank, and JP Power Ven.

Three more companies - all banks - are trading at market capitalisation which is closure to its equity capital : Indian Overseas Bank, UCO Bank, and Bank of Maharastra

It will be a uphill task for Aditya Birla Group and Vodafone to revive the Company

Vodafone Idea cracks 22% as AB Group unlikely to bring in fresh capital

Birlas may let Voda Idea go insolvent if government doesn’t help

Situation critical: Vodafone’s future in India in doubt after court ruling

it seems there is lot of backchannel discussion going on, on front both CEO saying we will allow bankruptcy and wont be able to fund anymore(pressure building tactics)… on the back they are apologising Govt and appreciating their supportive stance… i think govt may come with relaxed norms or waiver or some incentives for the sector soon… as the biggest looser in this default would be Govt itself… as Majority of money is lended by Govt banks itself… and they loose another large license fee, spectrum buyer…

Disc: Bought some options in Idea, pure speculation.

Idea CEO: “We have been engaged with the government very positively even before the AGR case. Their response has been very constructive;” he said. “Government is aware of the tremendous stress faced by operators. They want the sector to be healthy and thriving and believe that it is an important contributor to the country. Government is clear that they want to see 3 private players and 1 public players in the sector;” he added.

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Bayes formula application.

Given the dire situations seen in Voda-Idea stock, thought of applying the Bayes rule at different stages of information distribution.

Attached is the calculation sheet - hopefully it will help and self explanatory.
Probabilities are subjective and one can always play around with them based on their preferred choice.

Updated version Bayes_Vodafone_experiment.xlsx (16.4 KB)

Please do update and post if you find suitable modifications.

Hereunder is an article, extremely well written and very lucidly explains the industry scenario. Makes up a very interesting read.

The camel is inside the tent

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Please can you explain the terminologies involved?

Have edited and uploaded an updated version in the same post - above.

Not sure if you are aware of the basics of the Bayes rule - if you do then please ignore the example below. If you are not aware of the basics, would be best to look for simple examples on the web and then try following the excel in the same light.

The idea is to revise a given assumption or hypothesis (H) as and when information flows.
On 14 Nov 2019, the CEO was of the opinion, whether V-I would be a going-concern, i.e. it will soon shut shop. So the probability of assumption was 90%. And added it to some other evidence(E), that in past 20 years or 10 out of 14 providers failed, the probability of P(H/E) [read as probability of H given E] is calculated by the formula.

Next on 18/19 Nov 2019, V-I and Airtel announced price rise as they couldnt bear the pain anymore, the new probability of failure (or survival) is calculated.

Finally on 21 Nov 2019 the government moratorium was announced and the probablities were recalculated and at each stage the stock price reacted accordingly.

: Reliance Jio’s tariff changes broadly in line. Tariff saw an average increase of 27 percent for monthly plans and 36 percent for three-month plans. Expects Rs 37 incremental ARPU for Reliance Jio; Rs 24-27 for Vodafone Idea and Bharti Airtel. Reliance Jio is the biggest beneficiary; low risk of down-trading. One tariff hike done but more could come.
Tariff plans with an average increase of 32 percent over its previous Pawarprepaid plans not including the additional top-up for IUC on off-net outgoing calls. For some of the key plans, the premium of Bharti Airtel and Vodafone Idea over Reliance Jio has come off now.

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Does someone know(ballpark guess) how much the bank’s would recover from Vodafone Ideas Bankruptcy.

Any updates on the potential PE transactions in vodafone idea. There were rumours of KKR investing in assets of the co, which co would use to pare down debt - last month the UK parent also invested 200mn usd in the company to settle part of the dues. I think there’s a good likelihood that the co survives - otherwise vodafone uk would not commit 200mn usd after explicitly refusing to infuse any money

Looks like KKR decided to invest in Reliance Jio. I think the way PE investors are investing in Jio, it will be debt free in no time and will be ready for 5G.

For Idea, looking at MCap of other 2 players, it looks like it is available at a massive discount. I understand that is due to AGR and debt which might be massive uphill task but spending on data should increase and that should help them. Does anyone else feels like that or is it just me?

I also wonder if Jio entering in retail would work against it. It has tough competition from Amazon and flipkart and many other eCommerce players. Even last year, Amazon posted loss in retail business.

Amazon should just buy Vodafone for $2bn and take over all the debt + agr dues, total outlay around $20bn. 300mn captive consumers for Amazon. Better than buying 1% in Jio for $1.5bn!!

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