Shares of Vodafone Idea crashed for the second straight day on the bourses on Wednesday, as the debt-ridden company runs out of choices to raise fresh funds.
The inventory tumbled almost 20 per cent to file fresh lows on stories that Kumar Mangalam Birla, who owns about 27 per cent stake within the company, has provided to hand over his shareholding within the company to the federal government in trade for a bailout bundle in a bid to hold the company afloat.
Vodafone Idea closed at a 52-week low of ₹5.94, down ₹1.46 or 19.73 per cent on the BSE. It had opened at ₹7.20 as towards the earlier shut of ₹7.40.
On the NSE, it closed at ₹6, down ₹1.40 or 18.92 per cent. It hit a 52-week low of ₹5.95.
The company’s shares have been underneath strain since final month after the Supreme Court dismissed the functions filed by three telecom corporations — Bharti Airtel, Vodafone Idea and Tata Teleservices who had appealed to the apex court docket to permit them to make staggered AGR funds. They had additionally sought correction to calculation errors made by the Department of Telecommunication (DoT) in its AGR demand.
The resolution has come as an enormous blow to the money strapped Voda Idea which owes over ₹58,000 crore in AGR dues.
“I’m greater than keen to hand over my stake within the company to any entity — public sector/authorities/home monetary entity — that the Government might think about worthy of preserving the company going,” Birla mentioned in a letter addressed to Rajiv Gauba, Cabinet Secretary of India as beforehand reported by BusinessLine.
Vodafone Idea has been reeling underneath an enormous debt of almost ₹1.8-lakh crore and a money steadiness of solely ₹350 crore.
The group has invested over ₹12,200 crore within the telecom enterprise over the past 20 years. Birla additionally has oblique management over Vodafone Plc’s 44 per cent within the three way partnership company.
Furthermore, Vodafone Group Plc Chief Executive Officer Nick Read in a convention name with traders final month mentioned that India was a query for Vodafone Idea, refusing to put extra fairness into India.
“We as a gaggle strive to present them as a lot sensible help as we will, however I would like to make it very clear, we’re not placing any further fairness into India,” Read mentioned.
The UK-based Vodafone Plc has written off almost $12 billion in varied phases, on account of its Indian investments, each in Vodafone India and after its merger with Idea Cellular.
Vodafone Idea has been making an attempt to raise funds from traders over the past 12 months however has not been in a position to shut a deal. Birla mentioned international traders are eager to associate with Vodafone Idea, however need to see a transparent authorities intent to have a three-player telecom market.
The company’s future is in limbo with out fresh investments as it has additionally not been in a position to put money into future community roll-outs.
Brokerages have additionally remained cautious on the inventory. Yes Securities had given it a Reduce score final month with a goal value pf ₹8 publish its Q1 FY 2022 outcomes, seeing a draw back of 9 per cent.
ICICI Securities had given it a Sell score with a goal value of ₹5.
“VIL stays the weakest non-public telco. AGR dues cost extension was solely a short-term breather and its survival hinges on fast capital infusion and tariff hike/flooring tariff implementation. The want for capitalisation is pressing primarily due to its upcoming cost commitments, lagging spends on community and continued relative market share loss,” it had mentioned.