Retail investors slam Vodafone Idea over user wipeout, stock crash

Vodafone Idea (Vi) Shareholders Voice Frustration at EGM

Retail shareholders of Vodafone Idea Ltd (Vi) expressed significant concerns at a recent extraordinary general meeting (EGM) regarding the company's dwindling subscriber base and precarious financial situation. The EGM, called to approve a ₹20,000 crore fundraise, became a platform for shareholders to voice their anger over the persistently low share price and the substantial drop following last year's follow-on public offer (FPO).

Key concerns raised included:

• Plummeting Share Price: The share price, currently at ₹7.40, is over 38% lower than the FPO listing price of ₹12. This represents a significant loss for retail investors, and even the government's investment, made at ₹10 per share, is currently down 26%.
• Subscriber Losses: Continued loss of subscribers and weak data net adds were highlighted as major issues, raising questions about the company's future viability.
• Mounting Government Dues: Vodafone Idea owes approximately ₹2 trillion to the government, with a moratorium on payments expiring soon. Annual installments of over ₹18,000 crore will be due starting March 31, 2026, raising serious concerns about the company's ability to meet these obligations.
• Absence of Key Figures: The absence of Aditya Birla Group chairman Kumar Mangalam Birla from the meeting fueled further shareholder discontent.

Shareholder Statements:

Santosh Kumar Saraf, a retail shareholder, bluntly stated, "Despite previous fundraises, the share price shows no upside. If management can't handle the company, it should consider selling or surrendering it to the government."

Another retail investor, Redeppa Gunduluru, added, "The company needs to focus on increasing its business. Many small investors are stuck, incurring losses and facing volatile share prices."

Narender Chauhan, yet another shareholder, pressed the management for a clear roadmap for the next 3-4 years, including plans for pan-India 5G coverage and the launch of satcom services.

Management Response:

The management's responses were largely unsatisfactory. While the CFO confirmed that the ₹20,000 crore proceeds would be used for capital expenditure, crucial questions about the company's survival and future strategy remained unanswered. The non-executive chairman, Ravinder Takkar, dismissed many shareholder queries as being outside the EGM's agenda.

Analyst Perspective:

Analysts at Motilal Oswal echoed the concerns, stating that regaining subscribers will be a significant challenge given the competitive landscape. They also highlighted the potential for a significant annual cash shortfall and potential inability to meet its capex guidance.

The Future of Vodafone Idea:

The company's future remains uncertain, heavily dependent on securing bank debt and potential government relief on AGR dues. While the company plans significant capital expenditure, its success hinges on its ability to address the fundamental issues highlighted by its increasingly frustrated shareholders.