Vodafone Idea shares nosedive nearly 26 pc; m-cap drops by Rs 4,367 cr post SC order

Shares of Vodafone Idea on Friday plunged nearly 26 per cent after the Supreme Court dismissed telcos' plea seeking review of its earlier order asking them to pay Rs 1.47 lakh crore in past statutory dues by January 23.

The scrip tanked 25.21 per cent to close at Rs 4.51 on the BSE. During the day, it plummeted 39.30 per cent to Rs 3.66.

On the NSE, it cracked 25.83 per cent to close at Rs 4.45.

The company's market valuation also tumbled by Rs 4,367.34 crore to Rs 12,959.66 crore on the BSE.

In traded volume terms, 1,378.18 lakh shares of the company were traded on the BSE and over 107 crore shares on the NSE.

Bharti Airtel stock, however, jumped 5.47 per cent to close at Rs 500 on the BSE. During the day, it had fallen by 0.83 per cent to Rs 470.10.

The Supreme Court on Thursday dismissed review petitions of top telecom firms including Bharti Airtel and Vodafone Idea seeking review of its earlier order asking them to pay Rs 1.47 lakh crore in past statutory dues by January 23 saying it did not find any "justifiable reason" to entertain them.

In a big blow to telecom sector, India's apex court has dismissed the review petition filed by telecom companies to grant a relief on AGR liabilities, said a report by Motilal Oswal Institutional Equities.

"The verdict may put a severe burden on telcos and have inconceivable repercussions, particularly against the backdrop of VIL facing a risk of shutdown (it may result in Rs 1.2 lakh crore debt default, large-scale job losses and subscriber churn)," the report said.

With the Supreme Court rejecting a review of its order that put Rs 1.47 lakh crore liability of past dues on telecom firms, Vodafone Idea's ability to compete in the Indian market is likely to weaken and this will provide an opportunity for Bharti Airtel and Reliance Jio to gain market share, Moody's Investors Service said on Friday.

"The financial burden will likely further weaken Vodafone Idea's ability to compete in the Indian market, potentially providing an opportunity for competitors Bharti and Jio to gain market share," the US-based agency said.

The apex court had on October 24 ruled that the statutory dues need to be calculated by including non-telecom revenues in what is known as adjusted gross revenues (AGR) of telcos.

Bharti Airtel, in its plea, had sought review of the directions on aspects of levy of interest, penalty and interest on penalty relating to AGR.

With the Supreme Court dismissing its review petition on AGR dues, Bharti Airtel on Thursday said it is disappointed, and evaluating options to file a curative petition in the matter.

"While respecting the Supreme Court's decision, we would like to express our disappointment as we believe the long standing disputes raised regarding the AGR definition were bonafide and genuine," Airtel said in a statement.

UBS Group said the ruling raises risks for lenders to the companies. "IndusInd, Yes Bank and SBI appears to have relatively high exposure to Vodafone Idea," it said.

IndusInd Bank fell 2.46 per cent, Yes Bank 1.75 per cent and SBI 1.62 per cent on the BSE.