Shares of Vodafone Idea Ltd on Thursday slumped nearly 21% at open after reports suggested that the Aditya Birla Group will not infuse any fresh equity in the telecom operator and may let it go insolvent if government does not help. The stock plummeted 21.6% to ₹2.90 a share. At 9.45am, the stock traded at ₹3.02 on BSE, down 18.4% from its previous close.
Last month, the Supreme Court ordered Vodafone Idea to pay $4 billion of fees in past dues upholding a government definition of gross revenue, from which licence fee and spectrum payments made by telecom operators are calculated.
The troubled telecom company had a debt of around ₹1 trillion as of June end. It reported a net loss for the fourth consecutive quarter in April-June, with over ₹5,000 crore in losses. For fiscal 2019, the company had reported a loss of ₹14,056 crore.
The company will report its September quarter earnings later today. According to 5 analyst estimates polled by Bloomberg, the company is expected to report a loss of ₹4,387.60 crore, while revenue is seen at ₹10,925.10 crore.
The stock has plummeted over 87% so far this year. India’s telecom industry has been roiled by a tariff war since Asia’s richest man, Mukesh Ambani, launched low-price rival Reliance Jio Infocomm Ltd in 2016.
Earlier, Vodafone CEO Nick Read said that the Indian venture may be headed for liquidation unless the government eases off on demands for mobile spectrum fees. However, Read later apologised for his remarks.