India's now largest telecom company Vodafone-Idea will raise Rs 25,000 crores through right-issues. The ratio of the rights issue is at 87:38, meaning for every 38 shares held you have the right to buy 87 shares. When this news was announced Idea was trading around 28.50 and the issue price was announced 12.5, a massive discount of 56 percent.
Investors have been trapped in all ways:-
- Long-term investors are in 70% loss also.
- While those who thought that after the merger with Vodafone (LON:VOD), the company's debt problem will be solved and there is only good that can happen, are also in a huge loss.
The bidding for rights issue has been started from 10th April and will end on 24th April.
You should invest now or not?
Debt on Idea's books has piled up to Rs 1,23,660 crore at the end of Dec 2018 and due to the dominance of Jio, it is getting tough to pay off the debt. Now, 5G spectrum's auction is also approaching and that will decide the future of the company. So, investors should sit and watch the developments happening in the stock and according to the auction status, they can think of investing. Currently, investors must avoid investing in the stock. As the stock can fall more even after the rights issue.
We gave sell on Idea to our clients (see it on our facebook page) and currently it is in 4-5% of profit.
TARGET UPDATE:-
In our previous article, we gave buy call in Hindalco Industries Ltd. (NS:HALC) and Vedanta Ltd (NS:VDAN). Traders who followed our advice can book profits. It has reached the target 1.
Picture of the article in which call was given:-
The current chart of the Hindalco:-
In the article, the horizontal lines were the target, and target 1 has been achieved now.
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Next trading call:-
Godrej Consumer Products Ltd. (NS:GOCP) can give an opportunity to buy. Visit our facebook page to know whenever an opportunity is generated.