Historically Indians are good bargainers. Aren't we ? we always like to buy at a bargain price. One dollar bill at 50 Cent is always welcome! This is applicable to share/stock market as well. I will share details of 5 companies which according to me are the best buy at cheap price. So, first in my list is Vodafone Idea. Before we start, please go through the following price chart. Before the merger, only Idea was listed on both the stock exchanges while Vodafone was a private limited company.
In 2015, when it was at highest price of Rs. 120/share, it has now reached at a level of 11.90 by the end of the day on 5th Jan,2020. But wait a minute, this stock has already outperformed many of the established player as shown in following chart.
on 18th Feb,20 it reached at the bottom price of Rs.3 and after almost 11 months, it is at a level of Rs.12. 400 % return in just 11 months. All this happened because of the following positive factors.
(1) As per latest updates, Cash-strapped Vodafone Idea is likely to raise $2-$3 billion soon even as the promoters are currently involved in hectic discussions with investors for finalising the binding term sheet.
(2) The department of telecommunications (DoT) is likely to finally reject the Telecom Regulatory Authority of India’s (Trai) recommendation to levy a cumulative penalty of Rs 3,050 crore on Bharti Airtel and Vodafone Idea for not providing points of interconnection to Reliance Jio in 2016 when it had commenced operations.
(3) The SC verdict giving a ten year time frame for payment of AGR dues with 10 per cent upfront
payment can be regarded as reasonably fair. This will surely provide breathing space.
So based on these 3 points,chances of survival of Vi has drastically increased. However, profitability will remain under pressure since they will have to pay most of the profit to clear the dues. 5G roll out will also require a huge some of money. However, since fund raising has been intiated and Jio no loger offers cheap telecom services( In fact, They are the costliest right now), Vi Survival does not seem a concern and thats why I feel that Vi will survive and after couple of years will start generating profits even after paying AGR dues. Goverment also does not want 2 player market. With This 'Sanjeevani', Vi should surive.
What do you think ? Do let us know. Thank you.
Jai Hind.
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