Looking for some reprieve from the Centre and the judiciary in a bid to continue as a going concern, shares of Vodafone Idea zoomed by up to 24 per cent after the Supreme Court agreed to list next week telecom firms’ fresh pleas, seeking a fresh schedule of payment of statutory dues to the DoT.
The SC had on, January 16, rejected the telecom operators’ earlier plea seeking a review of the October 24 judgment on AGR payments, following which the shares of Vodafone Idea had fallen 28 per cent on January 17.
The SC’s decision to list the fresh plea for hearing next week lifted investor sentiment and at the NSE the scrip rose as much as 24.74 per cent to Rs 6.05. It settled 22.68 per cent up at Rs 5.95. Besides, the spurt in volume was over 2.16 times on the BSE and the stock has gained over 30 per cent in last three trading sessions.
On the other hand, Bharti Airtel stock ended marginally up by 0.41 per cent to Rs 511.35 on the BSE. On the NSE, the scrip lost 0.07 per cent to close at Rs 508.35.
Tata Teleservices (Maharashtra) stock settled 1.15 per cent lower at Rs 2.59 on the BSE and ended flat at Rs 2.60 on the NSE.
Meanwhile, shares of Reliance Industries, the parent firm of Reliance Jio Infocomm Ltd, gained 0.13 per cent to close at Rs 1,533.95 on the BSE and 0.17 per cent to Rs 1,535 on the NSE.
“It is learnt that telecom majors have moved the Supreme Court in a bid to delay payments that are due on January 23. This is after the SC last week rejected the pleas of telecom companies with regards to October verdict on adjusted gross revenue (AGR).
Volatility in Voda Idea stocks
Vodafone Idea’s share price has been witnessing extreme volatility over the last three months, since the SC order on AGR payment. As the promoters have gone on record to say that they won’t infuse additional equity, the company’s existence as a going concern now depends a lot on any relief that it can get from the apex court on payment schedule of its statutory dues to DoT.
“However, telecom players have got a fresh lease of life as the apex court has agreed to listen to pleas with regards to payment of statutory dues next week. In case of a negative outcome, the telecom sector will essentially move towards duopoly kind of market benefiting Airtel and Reliance Jio largely and the viability of other weaker players will be questioned amid uncertainty,” said Paras Bothra, president—equity research, Ashika Stock Broking.
The SC on Tuesday agreed to list next week the fresh pleas of telecom firms, including Airtel, Vodafone Idea and Tata Teleservices, seeking a fresh schedule of payment of statutory dues to the tune of Rs 1.47 lakh crore to the Department of Telecommunications (DoT). In the September 2019 quarter, while Bharti Airtel posted a loss of over Rs 23,044 crore, Vodafone Idea announced a record loss of Rs 50,921 crore on account of statutory dues arising from the SC order on AGR.
The telcos said they wanted an open court hearing on their fresh pleas. While the shares of the telcos took a beating after the SC order, the share price rose significantly after the telcos announced to raise tariffs by 40-50 per cent for pre-paid customers that account for a majority.
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