Citi upgraded Vodafone Idea to "buy" with a target price of Rs 13 per share, citing a significant bank guarantee waiver for spectrum payments. This relief eases financial pressure, improving funding prospects.

In a BSE filing, Vodafone Idea stated that this reform significantly eases its financial burden and removes a major obstacle in raising much-needed debt funding. The waiver comes as a timely relief for the cash-strapped telecom operator, which has been struggling to stabilize operations amid mounting debt.

Vodafone Idea stock has underperformed the market in the last six months as it has fallen 57 per cent, while slipping 52 per cent in the last one year. In comparison BSE Sensex has fallen 0.56 per cent in the last six months and 8.8 per cent in a year.

Citi is bullish on Vodafone Idea after the Department of Telecommunications (DoT) waived the bank guarantee requirement for the cash-strapped telecom operator. Citi also maintains its 90-day positive catalyst watch on Indus Towers.

The shares of Vodafone Idea experienced a jump in Mondays intraday trading, surging by 7% to reach Rs 8 apiece on the BSE. The uptick followed the announcement that the Department of Telecommunications (DoT) had waived the requirement for financial bank guarantees (FBGs) for spectrum acquired in auctions held in 2012,

Vodafone Idea shares rose over 6% on December 30, 2024, after the government waived Rs 24,800 crore in bank guarantees for past spectrum auctions, easing the telecom firm’s financial burden.

Shares of Vodafone Idea are up 4.3 per cent in past five sessions. For 2024, the stock is down 54.41 per cent. Bank guarantees were emerging as the stumbling block in Vodafone Idea's efforts to raise debt,

Citi said that any progress on Vodafone Idea's debt funding will be a key monitorable going forward and an added trigger for both Vodafone Idea and Indus Towers.