Shares of Vodafone Idea plummeted over 7%, trading at Rs 8.90 on the National Stock Exchange (NSE) today, following a notice issued by the Department of Telecommunications (DoT) regarding the company’s failure to pay required bank guarantees for past spectrum auction dues.
DoT Issues Notice for Non-Compliance
The DoT’s notice highlighted Vodafone Idea’s non-compliance in submitting the necessary bank guarantees linked to spectrum auction payments. This development occurs as the DoT engages with the finance ministry to discuss the potential waiver of the bank guarantee requirement, although no definitive decision has been reached.
According to a report from the Economic Times, the notice was prompted by the joint venture, formed between the UK’s Vodafone Group and India’s Aditya Birla Group, which did not provide the required bank guarantees on time for dues arising from spectrum auctions conducted prior to 2022.
Financial Pressures and Future Obligations
Financial Express has stated that it could not independently verify this report. The situation is particularly pressing for Vodafone Idea as its moratorium on spectrum auction dues is set to expire in September 2025.
The company is obligated to submit bank guarantees at least a year in advance to secure these dues. These guarantees are to be provided in phases for various auctions, with the first tranche expected by September 20, 2024.
The ongoing financial challenges faced by Vodafone Idea are compounded by the increasing scrutiny from regulatory authorities, raising concerns about the company’s ability to meet its obligations.
Vodafone Idea Stock Performance in Last One Year
The shares of Vodafone Idea have demonstrated negative returns across various time intervals. In the last month, the stock delivered a negative return of 39.76%. Over the past six months, it exhibited a significant decline, with negative returns of 31.65%, indicating a strong downtrend.
Year-to-date figures further emphasize the stock’s bearish trend, recording negative returns of 43.19%. Looking at the broader horizon, the shares have shown consistent weakness, with negative returns of 18.84% over the last year.
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