Vodafone Idea, Bharti Airtel tank up to 22% on Govt order to pay AGR dues

Vodafone (Photo-Bloomberg)
Shares of telecom services providers Vodafone Idea and Bharti Airtel were under pressure, plunging up to 22 per cent, in early morning trade on the BSE on Thursday on report that the government has directed the telcos to clear their adjusted gross revenue (AGR) dues in 3 months.

The Department of Telecommunications (DoT) has started the initial process of claiming its dues from telcos, directing them to pay up in accordance with the Supreme Court’s October 24 order, under which they have been given three months to fulfill their obligations, reported. CLICK HERE TO READ FULL REPORT

Shares of Vodafone Idea tumbled 22 per cent to Rs 2.90 to hit a fresh low on the BSE. The stock has tanked 28 per cent in the past two trading days after Vodafone Group CEO warned that without government relief, its venture in India was in a "critical situation".

"Vodafone Group Plc’s Indian venture may be headed for liquidation unless the government eases off on demands for mobile spectrum fees," Bloomberg reported quoting the phone company’s chief executive officer.

Last week, rating agency Brickwork Ratings, downgraded its rating on non-convertible debentures of Vodafone Idea and placed the rating under watch with negative implications.

"The rating revision is in view of the recent ruling by the Supreme Court of India pertaining to the AGR matter which is expected to put pressure on the company’s liquidity position and the continued deterioration in the company’s subscriber base as well as market share," it said in a statement.

It further added that the rating continued to remain constrained on account of "continuous loss of subscriber base and market share, risk of acceleration of repayment, intense competition in the sector and regulatory and technological risks associated with the sector".

Meanwhile, shares of Bharti Airtel were down 4 per cent at Rs 355 on the BSE, as compared to a 0.09 per cent decline in the S&P BSE Sensex.

Both the companies are scheduled to report their September quarter earnings later today. 

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