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Home / News / Business News / Vodafone Idea shares hit 52-week low amid uncertainty over future
Business

Vodafone Idea shares hit 52-week low amid uncertainty over future

Vodafone Idea shares hit 52-week low amid uncertainty over future
Written by Pratyush Deep Kotoky
Edited by Siddhant Pandey
Aug 05, 2021, 08:40 pm 3 min read
Vodafone Idea shares hit 52-week low amid uncertainty over future
Kumar Mangalam Birla stepped down as Vi’s (Vodafone Idea) non-executive chairman and director on Wednesday.

Trouble is mounting for debt-laden Vodafone Idea (Vi) as its shares tanked as much as 24% on the Bombay Stock Exchange Thursday. This comes a day after Kumar Mangalam Birla stepped down as Vi's non-executive chairman and director and appointed Himanshu Kapania as successor. The company witnessed a sharp fall in its share price in the stock market for the third consecutive day.

Market
Vi's shares hit 52-week low today

Vi's share price dipped by 24% to Rs. 4.6 apiece at 10 am on Thursday. This marks a 52-week low. At the same time, more than 2.67 crore Vi shares were under selling order. The company's shares have been noted to have plunged 45% in just four days. Incidentally, it was trading at Rs. 8.35 on Friday.

Context
Birla had recently offered his stake to government

Vodafone Idea has been going through severe financial distress due to its pending dues to the tune of Rs. 1.8 lakh crore and feeble operational profits. In a last-ditch effort to keep the cash-strapped company afloat, Birla had in June offered his 27.66% stake in the company to the government or any other entity that the government may consider.

Birla
Without government support, company may 'collapse': Birla

In his letter to the government in June, Birla had said that due to the lack of clarity on adjusted gross revenue (AGR) liability, the moratorium on spectrum dues, and the floor pricing regime, investors are not willing to infuse money into the telecom company. He had sought immediate support from the government, saying that Vi could come to an "irretrievable point of collapse."

Quote
Birla offered stake with 'sense of duty' to customers

In his letter, Birla said, "It is with a sense of duty towards the 27 crore Indians connected by VIL, I am more than willing to hand over my stake in the company to any entity: public sector/government /domestic financial entity."

Government
Government planning long-term relief package for ailing telcos

The government is planning a long-term relief package for the financially distressed telecom sector, The Economic Times recently reported. A major portion of the financial burden of telecos arises from AGR dues and spectrum charges. Reportedly, the government's relief package is likely to address these two issues, including a plan to redefine AGR to exclude 'non-telecom items' and allowing telcos to surrender unused spectrum.

Concerns
Will government's relief package help Vodafone?

It is unlikely that the long-term relief package will help Vi, since the company needs immediate support with its alarming debt. The company's woes have also been compounded by weakening revenue and lack of investment. Vodafone Group CEO Nick Read has also clarified that it has no intention to pump more funds into its debt-ridden Indian joint venture.

Information
SC had earlier rejected pleas of telecos

Earlier this year, Vi, Bharti Airtel, and Tata Teleservices had approached the Supreme Court, seeking the recalculation of AGR dues decided by the government. However, the SC had rejected their appeals and ordered the companies to pay their AGR dues by 2031 in 10 installments.

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Pratyush Deep Kotoky
Pratyush Deep Kotoky
Twitter
Pratyush Deep Kotoky covers national and politics news at NewsBytes. His over three-year-long career involves reporting on sociopolitical issues across India, particularly the northeast region. His previous stints include 101Reporters, The Sunday Guardian, and Inshorts, and he has also written for Asia Times, Firstpost, and Newslaundry. He has a postgraduate degree in Journalism from the Indian Institute of Mass Communication, Delhi.
Siddhant Pandey
Siddhant Pandey
Twitter
Siddhant Pandey covers national and health news at NewsBytes. He has over five years of experience working as a multimedia journalist covering hard news in New Delhi. He was previously employed with The Indian Express and News World India and has juggled roles as a correspondent, copy editor, and video producer. He holds a Bachelor’s degree in Biotechnology from the Jaypee Institute of Information Technology, Noida.
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