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

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

, ETMarkets.com|
Updated: Nov 14, 2019, 03.41 PM IST
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BCCL
Voda---Idea---BCCL
The Vodafone Idea (VIL) board is meeting on November 14 to consider the company’s fiscal second quarter results.
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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