Idea shares collapsed to nearly 9-year low on Wednesday on news report of government rejecting Idea Cellular-Vodafone India dues request.
Idea shares collapsed to nearly 9-year low on Wednesday on news report of government rejecting Idea Cellular-Vodafone India dues request. Shares of Aditya Birla Group’s telecom company Idea Cellular tumbled within an hour of stock market opening on Monday and fell to a multi-year low around mid-morning session. The DoT (Department of Telecommunications) has rejected Vodafone India and Idea Cellular’s requests to recalculate their dues and has said that both the companies should pay to get a final seal of approval on their merger, ET reported.
Idea share price crashed 7.91% to a nearly 9-year low of Rs 48.3 on NSE today. This is the lowest level for Idea shares since 2009. Idea Cellular shares made a low of Rs 48 on 27 November 2009. On BSE, Idea shares made a low of Rs 48.4, down by 7.72% from Tuesday’s closing price. By the end of the day, Idea shares managed to recover some of their losses and closed at Rs 50.2 (down 4.29%) on NSE and at Rs 50 (down 4.67%) on BSE.
Idea and Vodafone are likely to pay Rs 7,268 crore spectrum dues to the DoT ‘under protest’ in a few weeks, CNBC-TV18 reported citing unidentified sources.
Following the development, heavy trading was seen in the shares of Idea Cellular. Until stock market closing, about 3.09 crore equity shares got exchanged on both the stock exchanges BSE and NSE. Earlier in May this year, Idea Cellular shares dropped to 8-year low following the decline in share prices of telecom companies after Mukesh Ambani’s Reliance Jio Infocomm came up with a ‘Zero Touch’ postpaid plan. In the current year 2018, Idea has lost about 53% of its stock market value as the stock has declined to Rs 52.45 from a share price level of Rs 108.15 as on 29 December 2017 on NSE.
Earlier this month only, the DoT approved Vodafone India-Idea Cellular merger. “DoT has cleared the Vodafone-Idea merger today. They will have to meet conditions for final approval,” PTI reported citing unidentified government sources. In April 2018, following the Q4 results declaration, Idea Cellular said that merger of Idea and Vodafone India has reached the final leg of regulatory approvals and expected to be completed by June. Idea Cellular and Vodafone India have announced last year that they would combine their operations. Idea Cellular and Vodafone India, if combined, will become India’s largest telecom company holding about 35% market share with a worth of $23 billion.