Vodafone Idea stock tanks 10% on survival worries, Telecom News, ET Telecom Leave a comment

Vodafone Idea stock tanks 10% on survival worriesShares of Vodafone Idea (Vi) opened at Rs 8.96 , down by 9.95% in early trading hours on BSE on Thursday. The plummet was on back of the back of the telco posting a loss of Rs 6985.1 crore for the January-March quarter, substantially wider than the loss in Q3.

The telco said it was hurt by an exceptional loss, even as the absence of interconnection usage charge (IUC) dragged revenue for the mobile phone operator which again warned of risks to its viability.

“There exists material uncertainty relating to the company’s ability to continue as a going concern which is dependent on its ability to raise additional funds as required, successful negotiations with lenders on continued support, refinancing of debts, monetisation of certain assets….,” India’s only loss-making private operator said.

Total quarterly revenue for the cash-strapped operator fell to Rs9,607.6 crore from Rs 10,894.1 crore in the October-December period, the company said in a notice to the stock exchanges on Wednesday.

Among other risks flagged by the operator was the fate of its plea filed in the Supreme Court to reduce its adjusted gross revenue (AGR) dues from the over Rs58,00 crore demanded by the telecom department, acceptance of its request by the government to defer payment of Rs8,211.7 crore towards spectrum purchases, which falls due on April 9, 2022, and generation of adequate cash flow from operations that it needs to settle/renew its liabilities/guarantees as they fall due.

The telco added that as a result of a rating downgrade, certain lenders had asked for increase of interest rates and additional margin money or security against existing facilities.

“The Group has exchanged correspondences and continues to be in discussion with the lenders for the next steps/waivers,” it said.

The joint venture between UK’s Vodafone Group and India’s diversified Aditya Birla Group had announced a Rs25,000-crore fund raising last September via a mix of equity and debt, which hasn’t yet been finalised despite holding talks with various potential investors for several months.

The operator’s average revenue per user (ARPU) was Rs 107, lower than Rs 121 clocked in the fiscal third quarter. Rivals Bharti Airtel and Reliance Jio, also impacted by a pause in IUC have posted an ARPU of Rs 145 and Rs Rs 138.2 respectively in January-March quarter.

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