Vodafone Idea share price plunged nearly 10 per cent to ₹6.66 apiece in Tuesday’s trading session following the government’s clarification that no further relief is planned for the telecom company regarding its adjusted gross revenue (AGR) dues.
Vodafone share price has remained volatile in the near-term. The stock gained nearly 3 per cent in past five trading sessions, however, descended 5 per cent in a month.
What’s behind the plunge?
Mint reported on Monday that a decision on extending further relief to the struggling telecom operator Vodafone Idea will be made after consultations with Prime Minister Narendra Modi, the Union Cabinet, and the finance ministry, Minister of State for Communications Chandra Sekhar Pemmasani said. He added that, given the substantial amount involved, any decision regarding the relief would be a collective one.
“At this time, there is nothing that we have planned (on providing relief),” the minister was quoted as saying.
The government holds a 49 per cent stake in the struggling telecom operator, which has warned that it may not remain operational beyond the current financial year.
On Friday, Mint reported that the Department of Telecommunications (DoT) had submitted “multiple relief options” for the company to the Prime Minister’s Office (PMO) last month.
These measures involve an additional two-year deferment of statutory dues currently under moratorium, reduced annual payments, and a waiver of penalties along with interest on penalties related to adjusted gross revenue (AGR) dues. According to sources cited by Mint, the PMO will make the final decision on whether to extend any relief measures.
When questioned about discussions between the DoT and the PMO regarding potential relief for Vodafone Idea, the minister responded, “not that we know of.”
Debt-laden Vodafone Idea owes approximately ₹83,400 crore in AGR dues to the government, with annual installments of ₹18,000 crore set to begin next March. The company has earlier stated that banks are reluctant to extend further credit due to its massive liabilities, warning that it may not survive beyond a year without fresh funding. Overall, its total dues to the government, including penalties and interest, stand at around ₹2 trillion.
The telecom operator also held its 30th Annual General Meeting (AGM) on Monday, where it disclosed in an exchange filing that Kumar Mangalam Birla, chairman of the Aditya Birla Group, was unable to attend due to prior commitments.
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