More Trouble For Vodafone Idea After The Telco's Shares Fall More Than 14 Per Cent

Mobile

Vodafone Idea shares continue to fall days after concerns over statutory dues raised by its chairman Kumar Mangalam Birla. Read complete details here.

Written By Tech Desk | Mumbai | Updated On:
Vodafone

Vodafone Idea shares continue to fall days after concerns over statutory dues raised by its chairman Kumar Mangalam Birla. Vodafone Idea's shares fell more than 14 per cent in early trade on Monday. Vodafone Idea's stock was trading 4.91 per cent down to Rs 6.58 on the BSE. In early trade, the stock hit a low of Rs 6.07, declining as much as 12.28 per cent over its previous close.

On the NSE, the stock lost 4.35 per cent to Rs 6.60. It fell 14.49 per cent to Rs 5.90 apiece during the session. Chairman of India's third-largest telecom service provider, Birla said last week that the telco will shut shop if the government does not provide relief on the liability it faces in past statutory dues following October 24 Supreme Court order.

READ | 'Vodafone Idea shut down could impact PM Modi's 5 trillion dollar economy target'

Airtel, on the other hand, may consolidate its position at the expense of Vodafone Idea Ltd as it has better balance sheet strength to deal with the eventuality of having to pay past statutory dues in case the Supreme Court rejects their review petitions, brokerages said.  Meanwhile, shares of Bharti Airtel gained 0.63 per cent to Rs 447.55 on the BSE.

Last month, Vodafone CEO Nick Read had raised similar concerns hinting that the mounting debt on Vodafone Idea could result in the company's untimely exit from the India market. Read had said that the government needs to ease off on payment demands to ensure a future for Vodafone-Idea Ltd.

READ | Vodafone Idea shares fell over 5% after KM Birla's 'will have to shut shop' comment

The Supreme Court of India upheld the government's position on including revenue from non-telecommunication businesses in calculating the annual Adjusted Gross Revenue (AGR) of telecom companies, a share of which has to be paid as license and spectrum fee to the exchequer.

Vodafone Idea had said its ability to continue is dependent on obtaining relief from the government and positive outcome of the proposed legal remedy. Vodafone Idea estimated liability of Rs 44,150 crore post the apex court order and made a provision of Rs 25,680 crore in Q2 2019.

Published:
By 2030, 40% Indians will not have access to drinking water
SAVE WATER NOW
PEOPLE HAVE PLEDGED SO FAR
DO NOT MISS