Shares of Vodafone Idea saw a major fall Thursday after the Supreme Court allowed the Centre to recover dues from telcos, increasing the financial burden on them and their lenders.
Shares of Vodafone Idea saw a major fall Thursday after the Supreme Court allowed the Centre to recover dues from telcos, increasing the financial burden on them and their lenders. The stock plummeted 27.43 per cent after the apex court allowed the petition by the Centre to recover adjusted gross revenue (AGR) of nearly Rs 92,000 crore from telecom service providers. The stock closed at Rs 4.33 on the BSE. During the day, it fell 27.43 per cent to Rs 4.10, its 52-week low. Similarly, Bharti Airtel dropped 9.68 per cent to Rs 325.60. However, it rebounded to end the day 3.31 per cent higher at Rs 372.45.
Taking stock of the matter, the Cellular Operators’ Association of India (COAI) said in a statement that it remains to be seen whether the telecom industry will be able to recover from this setback. “The Supreme Court’s judgment is the last straw in contributing to financial distress and it remains to be seen whether the industry will be able to recover from this setback. The immense financial pressure on the sector will also adversely impact ‘Digital India’ rollout,” Rajan S Mathews, director general of COAI, said.
Following the apex court order, the banking stocks also saw pressure as Yes Bank tumbled 5.76 per cent, SBI dropped 4.65 per cent, IndusInd Bank 3.78 per cent, Axis Bank 1.03 per cent HDFC Bank 0.44 per cent and ICICI Bank 0.22 per cent.
Meanwhile, the benchmark equity indices — Sensex and Nifty — ended on a negative note tracking fall in banking and IT heavyweights such as Infosys, State Bank of India, HDFC Bank and IndusInd Bank, mixed results in Haryana and Maharashtra polls and Supreme Court’s verdict against telecom companies in AGR. However, Reliance Industries, Bharti Airtel and HCL Technologies were the major gainers in the trade today. Sensex ended the intraday trade 38.44 points lower at 39,020.39, while Nifty settled below 11,600.