Vodafone Idea shares tumble 23%
Telecom major erodes `2,988 cr in m-cap in wake of SC order on statutory dues
New Delhi: Shares of Vodafone Idea (VIL) on Friday tumbled over 23 per cent after the company reported widening of losses in the third quarter of 2019-20 and following the Supreme Court taking a strong note of non-compliance of its order asking telecos to pay Rs 1.47 lakh crore in statutory dues.
The scrip plummeted 23.21 per cent to close at Rs 3.44 on the BSE. During the trade, it dropped 27.45 per cent to Rs 3.25. On the NSE, it tanked 22.22 per cent to close at Rs 3.50.
The company's market valuation also fell by Rs 2,988.03 crore to Rs 9,884.97 crore on the BSE. Vodafone Idea on Thursday reported widening of losses to Rs 6,438.8 crore in the third quarter of 2019-20 against Rs 5,004.6 crore a year ago, as the teleco continued to sound out warnings on 'material uncertainty' casting 'significant doubt' on its ability to continue as going concern.
For the three months ended December 2019, the company's total income fell by five per cent to Rs 11,380.5 crore from Rs 11,982.8 crore a year ago.
The Supreme Court on Friday directed the top echelons of telecom firms to explain why contempt action should not be taken against them for non-compliance of its order to pay adjusted gross revenue (AGR) dues of Rs 1.47 lakh crore to the telecom department.
"The SC order directing the telecom companies to settle the pending AGR dues by March 17, 2020, puts further uncertainty on their operational sustainability, particularly that of Vodafone Idea.
The latter's ability to pay an amount of over Rs 55,000 cr by the stipulated date is uncertain given its current financial flexibility.
While Airtel needs to pay an amount of Rs 35,500 cr, they have been able to raise funds in the recent past," Suman Chowdhury – president (ratings) at Acuité Ratings & Research, said.