Vodafone Idea Jumps 5% as Birla Buys Stake, Emkay Doubles Target

Introduction

Shares of Vodafone Idea (Vi) surged nearly 5 percent on Monday, February 9, 2026, reaching a high of ₹11.62, a level not seen since early January. The rally was driven by two significant positive developments: a strategic stake increase by promoter Kumar Mangalam Birla and a bullish rating upgrade from brokerage firm Emkay Global, which doubled its target price for the stock. This move snapped a three-day losing streak for the telecom operator, signaling renewed investor confidence.

Promoter's Vote of Confidence

Market data revealed that Kumar Mangalam Birla, a key promoter of the company, acquired a substantial number of shares from the open market. Between January 30 and February 1, 2026, Birla purchased a total of 4.09 crore equity shares. The transactions were executed in two tranches: 2.21 crore shares on January 30 at an average price of ₹10.95 and another 1.88 crore shares on February 1 at an average of ₹11.13 per share. The total investment for this acquisition amounted to approximately ₹45.18 crore. This purchase increased his personal holding in the company, which stood at 0.02 percent as of December 31, 2025. The promoter and promoter groups collectively held a 25.57 percent stake at the end of the last quarter.

Brokerage Upgrades Signal Optimism

Adding to the positive sentiment, Emkay Global Financial Services upgraded its recommendation on Vodafone Idea's stock from 'Sell' to 'Add'. More significantly, the brokerage doubled its target price for the scrip to ₹12 from ₹6. This revised target suggests a potential upside of nearly 8 percent from the stock's previous closing price. The upgrade is a notable shift in perspective and is rooted in recent government actions that have improved the company's financial outlook.

The Government's Lifeline: AGR Moratorium

Emkay Global's optimism is primarily based on the government's decision to approve a major moratorium for Vodafone Idea's Adjusted Gross Revenue (AGR) liabilities. This relief measure allows the company to make minimal annual payments until FY35, providing substantial cash flow relief. The brokerage noted that this move reduces the net present value (NPV) of the AGR burden by 60-80 percent, significantly easing immediate survival pressures. This financial breathing room is expected to enable Vi to secure bank funding for its crucial 4G and 5G network expansion, which is essential to arrest subscriber churn and regain market share.

Ratings Agency Outlook Improves

Corroborating the improved outlook, CARE Ratings (CareEdge Ratings) also revised its outlook on Vodafone Idea's long-term bank facilities from 'Stable' to 'Positive'. While reaffirming its 'CARE BBB-' rating, the agency highlighted that the AGR relief strengthens the company's prospects for securing long-term debt to fund necessary network capital expenditures. This, in turn, is expected to lead to an improvement in its operational performance. The government's support, including the earlier conversion of spectrum dues into a 49% equity stake, underscores the strategic importance of maintaining a three-player telecom market.

Path to Recovery and Future Plans

With improved funding visibility, Vodafone Idea plans to undertake significant capital expenditure, with an estimated outlay of around ₹45,000 crore between FY27 and FY29. These investments are critical for enhancing network competitiveness, growing the subscriber base, and supporting the expansion of its Average Revenue Per User (ARPU). The company's ARPU has already shown improvement, rising to ₹172 in Q3FY26 from ₹164 in FY25, driven by plan upgrades. The telecom sector anticipates another round of tariff hikes in FY27, which could further boost the ARPU for all players.

Key Risks and Headwinds

Despite the positive developments, Emkay Global and other analysts have pointed out key risks that remain. The company's ability to successfully execute its turnaround plan hinges on several factors. These include its capacity to increase its subscriber market share in a highly competitive environment, implement tariff repairs to significantly boost ARPU, and effectively upgrade its large 2G subscriber base to 4G and 5G services. Failure in these areas could impede its long-term recovery.

Market Reaction and Stock Performance

The market responded positively to the news, with heavy trading volumes. Nearly 380 million equity shares were traded on the NSE and BSE during the session. The stock's jump to ₹11.62 brought it closer to its 52-week high of ₹12.80, which was recorded on December 31, 2025. The renewed interest from both promoters and analysts suggests a potential shift in the narrative for the beleaguered telecom operator.

Conclusion

The recent events mark a significant positive turn for Vodafone Idea. The combination of promoter confidence, a crucial government moratorium on AGR dues, and subsequent upgrades from brokerages provides a credible path for a potential turnaround. While the company's long-term sustainability is no longer the most pressing concern, its future success will depend on effective execution of its network expansion and its ability to compete effectively against its larger rivals.