Vodafone Idea shares dive 12% as SC rejects $5B dues waiver

Vodafone Idea shares crashed 12.2% to their intraday low of Rs 6.47 on the BSE on Monday after the debt-laden telecom operator’s plea to waive over $5 billion in interest and penalties on statutory dues was rejected by the Supreme Court today.

The plea was earlier rejected by the Department of Telecommunications (DoT), challenging which, Vodafone Idea approached the Supreme Court regarding a resolution for the same.

According to Reuters, the Department of Telecommunications (DoT) on April 29 rejected a plea from Vodafone Idea CEO Akshaya Moondra seeking relief on interest and penalties arising from a $9.76 billion dues demand. “The request cannot be considered,” the communications ministry wrote, despite Moondra warning that the survival of India’s third-largest telecom company was at stake.

Following the rejection, Vodafone Idea—jointly owned by UK-based Vodafone Group and India’s Aditya Birla Group—filed a petition in the Supreme Court on Thursday. The company urged the court to direct the government to act “in public interest,” citing the critical nature of the telecom sector. The court is expected to hear the matter this week.

The company has been burdened with dues since a 2019 Supreme Court ruling widened the definition of adjusted gross revenue (AGR), increasing liabilities for telecom operators. While the government converted part of Vodafone Idea’s dues into equity—raising its stake in the company to 49%—the operator still faces substantial financial stress.

It remains unclear how much of the $9.76 billion Vodafone Idea is seeking to have waived, though the petition states that over $5 billion pertains to penalties and interest.Also Read: Street Favourite! SBI, Tata Motors among 10 large-cap stocks analysts expect to rally up to 32%By contrast, larger rival Bharti Airtel has also faced AGR-related dues but remains in better financial shape. Vodafone Idea’s net debt stood at $25 billion as of September, according to CLSA.

Shares of Vodafone Idea rose 1.9% on Friday to close at Rs 7.37 on the BSE but are down 44% over the past year.

(With inputs from agencies)

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