India's top telecom stock Vodafone Idea is also the biggest money loser

Although Vodafone Idea Ltd. hasn't made a profit since 2017, its shares have more than doubled in the past three months

For investors riding a rally in India’s wireless carriers, the best returns are coming from an operator that’s warned it may collapse without help from the government.

Although Vodafone Idea Ltd. hasn’t made a profit since 2017 and ended last fiscal year with a record $10 billion loss, its shares have more than doubled in the past three months. The surge has been driven mostly on optimism that the Indian government will rescue the beleaguered carrier after the Supreme Court burdened it with billions of dollars in fees.

Gains made by the penny stock outpaced the 51 per cent jump for Reliance Industries Ltd., the conglomerate behind India’s No. 1 carrier, and the 3.1 per cent gain for Bharti Airtel Ltd, the No 2 rival.

The joint venture between UK-based Vodafone Group Plc and the group controlled by Indian billionaire Kumar Mangalam Birla had already been struggling in the face of a devastating price war since the entry of Mukesh Ambani’s Reliance Jio Infocomm Ltd. in 2016. Vodafone Idea has shed millions of subscribers amid intense competition, and has said it may no longer be a “going concern.”

“Vodafone Idea appeals to a very different class of investor,” said Vivekanand Subbaraman, associate vice president, Ambit Capital Pvt. “It is a market way of saying that if it survives, it is going to be worth a lot more. ”