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Vodafone Idea Ltd. being one of the biggest money loser is still attracting investors, Why ?

Jio’s rival, Vodafone Idea Ltd. recorded a 5.4 percent decline in its Q1 revenue as reported on Thursday. According to the experts, the coronavirus outbreak followed by nationwide lockdown in different phases is the main reason for this downfall. The pandemic hurt the telecom company’s operational activity as a result of which it lost subscribers. However, an interesting trend can be observed in the share market as Vodafone Idea Ltd. is one of the biggest money losers but still, it is attracting investors.

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Vodafone Idea Ltd. Q1 Result: An Overview

Vodafone Idea Ltd. is a joint-venture between Idea Cellular and Vodafone Group. The company stands to be the third-largest telecom operator in India. Vodafone is Britain’s company while Idea Cellular is led by billionaire Kumar Mangalam. Not only the pandemic but also the government’s order to pay overdue levies and interest pushed the venture in negative territory. As a result of which Vodafone Idea Limited kept aside Rs. 194.41 billion to pay the due. Thus, reporting a larger quarterly loss.

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The subscriber base of Vodafone Idea Ltd. also dropped down to 279.8 million subscribers in the first quarter.

At the same time, the average revenue per subscriber declined to Rs. 114 in Q1.

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The third-largest telecom company in terms of subscribers recorded a consecutive quarterly loss for the eighth time.  The company hasn’t made a profit since 2017 and this time the company lost Rs. 254.6 billion (Rs.25,460 Cr).

However, Vodafone Idea Ltd. is still attracting investors. The company’s shares have more than doubled in the past three months

Why Vodafone Idea Ltd. is still attracting investors?

This hike in the number of investors is mainly on optimism that the government will rescue the beleaguered carrier after the Supreme Court burdened the company with billions of dollars in fees last year.

Moreover, the gains made by the penny stock recovered unexpectedly, Reliance Industries Ltd. jumped up 51 percent while Bharti Airtel Ltd. jumped up by 3.1 percent.

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