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    Vodafone Idea cracks 22% as AB Group unlikely to bring in fresh capital

    Synopsis

    Following the development, the scrip tanked 21.62 per cent to hit a low of Rs 2.90 in early trade.

    The Vodafone Idea (VIL) board is meeting on November 14 to consider the company’s fiscal second quarter results.

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    NEW DELHI: Shares of Vodafone Idea nosedived 22 per cent in Thursday’s trade after senior executives aware of the matter told ET that Aditya Birla Group might not infuse any fresh equity into Vodafone Idea and let it opt for insolvency if the government does not provide substantial relief.

    The telecom operator is seeking relief for its adjusted gross revenue (AGR)-based dues, which could be over Rs 39,000 crore.

    Following the development, the scrip tanked 21.62 per cent to hit a low of Rs 2.90 in early trade, before recovering a bit.

    “The telecom business seems to be making money for everyone else except the players. It is unviable and unsustainable and will only drag down the group’s profitability. We need to rethink our capital allocation better in a difficult business environment,” said a senior group executive.

    A group official said the Indian conglomerate agreed with the comments of Vodafone Group CEO Nick Read on Tuesday.

    “If you don’t get the remedies being suggested, the situation is critical,” Read said after Vodafone Group’s quarterly results on Tuesday. “If you’re not a going concern, you’re moving into a liquidation scenario — can’t get any clearer than that.”

    The Aditya Birla Group spokesperson didn’t respond to ET’s queries. The Vodafone Idea (VIL) board is meeting on November 14 to consider the company’s fiscal second quarter results.

    The shares of the company closed 20.27 per cent lower at Rs 2.95 on BSE.
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    6 Comments on this Story

    Vijay Pugalia339 days ago
    Failure to negotiate RCEP deal
    Failure to stop cancellation of Amaravati Capital city project
    BSNL revival deal
    Failure to bring IBC process on track
    Failure to stop Delhi pollution problem
    Failure to prevent strike in Manesar Honda plant
    Failure to stop DoT to go to court for decision on Gross AGR decision
    Sudhir Brahma Brahma340 days ago
    Lack of experience in governance by the current govt is causing havoc in every sector. Moody''s has just downgraded India ratings again. This Govt just talks big...does nothing because it does not know what to do. The good and capable people who could guide and advice well were all hounded out
    Suresh Kamath340 days ago
    Earlier it was the Case of Ore Mining in India which was TRULY the Top pick of the Sectors delivering good Revenues for the Govt and that was PICKED by the Order of the APEX Court then and NOW Ore Industry is "in the very WELL" mining deeper to cover itself and ALL investment ZERO and now it seems to be the turn of Service Providers and with a handful of these in Operation these MAY go the path of the Ore Industry sooner with such DEMANDS ordered by the SC and DOT to pay with 3 months
    Killing the Goose which gave Golden Eggs and now these acts is akin to this ADAGE
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