Vodafone Idea Stares At Bankruptcy As Stocks Tank 11% To Rs 3 After SC's Ruling On AGR

This massive tank in Vodafone India's shares came after after India Ratings downgraded its rating on non-convertible debentures of Rs 3,500 crore citing stress on the company's near-term liquidity post the Supreme Court's ruling on AGR.

From a 52 week high of Rs 35.30 a stock that Vodafone Idea logged on March 13, 2019, it has now fallen to around Rs 3 a share on Tuesday. (Representative Image/ Getty)

New Delhi: Debt-ridden telecom major Vodafone Idea Limited on Tuesday inched closer on the brink of bankruptcy as it continues to struggle to clear its Adjusted Gross Revenue (AGR) dues to the Department of Telecom (DoT), as directed by the Supreme Court after telecom companies failed to clear their outstanding dues. What made things more gruesome for the telecom operator was the fact that its scrips on Tuesday closed 11 per cent lower to Rs 3 a stock. This massive tank in Vodafone India's shares came after after India Ratings downgraded its rating on non-convertible debentures of Rs 3,500 crore citing stress on the company's near-term liquidity post the Supreme Court's ruling on AGR. From a 52 week high of Rs 35.30 a stock that Vodafone Idea logged on March 13, 2019, it has now fallen to around Rs 3 a share on Tuesday as its survival has come under question after the apex court ruling on February 14 directing the telcos to pay the adjusted gross revenue (AGR) related liabilities to the government next month. With the government mulling the possibilities of invoking bank guarantees of the telcos to recover the statutory dues, Vodafone Idea chairman Kumar Mangalam Birla on Tuesday met Telecom Secretary Anshu Prakash on the AGR payment issue after paying Rs 2,500 crore on Monday. The company had urged the court that the bank guarantee deposited with the government by Vodafone Idea should also not be encashed. Birla has maintained that without relief on the AGR payout, it may not be possible to continue as a going concern. The company in a regulatory filing said that "India Ratings and Research (Ind-Ra), has downgraded its rating on Non-Convertible Debentures of Rs 3,500 crore of erstwhile Vodafone Mobile Services Limited (since merged with the Company)". Finance Minister Nirmala Sitharaman on Monday said the Telecom department has been actively engaging with telecom companies over the issue of statutory dues and she would wait to hear its decision. Post the court's latest verdict, it will only be proper to wait and hear from the department concerned, she told reporters when asked whether the government was mulling relief for the telecom companies after the recent Supreme Court orders directing them to clear the dues. Supreme Court, last week, rejected a plea by telecom firms including Bharti Airtel and Vodafone Idea Ltd for extension in the payment schedule and asked them to deposit an estimated Rs 1.47 lakh crore in past dues for spectrum and licenses by March 17. According to reports, Vodafone Idea Ltd (VIL) has said its board has authorised the company to immediately pay Rs 2,500 crore, a portion of its statutory dues, to the telecom department. The company also said that it will pay another Rs 1,000 crore before the end of the week. VIL said that based on overall review of the position, the board has authorised the company to "immediately pay" to the telecom department a portion of AGR dues aggregating to Rs 2,500 crore on Monday and further Rs 1,000 crore before end of the week. (With inputs from agencies)