In an interaction with CNBC-TV18, Malhotra said that for at least the next one to two years, Vodafone Idea’s survival is not at risk, thanks to the recent equity conversion of spectrum dues. He added that there is scope for further conversion of spectrum-related liabilities into equity over time.
“So, I don’t think existential issues are there for Vodafone right now, given the optionality of converting a reasonable portion of spectrum debt into equity in the coming years. However, from a business perspective, challenges remain,” he added.
Vodafone Idea had earlier cautioned that it may not be able to continue operations beyond the financial year 2025-26 without further government support.
Following the recent equity conversion, the government now holds a 49% stake in Vodafone Idea.
Malhotra also highlighted the telco’s limited network investment capabilities. “You are not able to spend as much as you would like on your network. And at the end of the day, the player with better network investments wins—not just in India, but globally.”
A day earlier, HSBC reiterated its ‘Reduce’ rating on Vodafone Idea, citing high leverage and stretched valuation. It also cut the stock’s target price from ₹6.50 to ₹5.90 per share earlier.
The foreign brokerage warned that delays in Vi’s planned network investments could lead to further market share gains for rivals Airtel and Jio.
Vodafone Idea’s subscriber market share has already declined to around 17% in FY25, from 21% in FY22, as its network investments lagged behind peers. HSBC, in its base case, assumes that Vi will continue with its capex cycle that began in FY25—expected to slow the pace of subscriber erosion from FY26 onwards.
However, any further delays in these investments could accelerate Airtel and Jio’s market share gains.
Shares of Vodafone Idea are currently trading 1% higher on Wednesday at ₹7.04. The stock has fallen 12% so far in 2025.
