Vodafone Idea drops 9% as Govt seeks 'more time' to draw resolution plan

During the company's hearing in the Supreme Court, the Department of Telecom (DoT) sought time till October 6 to come up with a resolution plan

Vodafone Idea investors, hoping for a clarity on the debt-laden company's survival, were left in the lurch yet again on Friday after the Government sought more time to come up with a resolution plan. This sent Vodafone Idea shares nearly 9 per cent lower in the intraday trade on the BSE.

 

During the company's hearing in the Supreme Court, the Department of Telecom (DoT) spoke on the behalf of the government and said that it needed more time until October 6 to come up with a resolution plan. Vodafone Idea raised no objections to the government's demand.

 

On the bourses, Vodafone Idea share price plunged 8.9 per cent on the BSE today, hitting a low of ₹7.90 per share. At 12:17 PM, the shares were trading over 6 per cent lower at ₹8.14 per share as against a 0.48 per cent slide in the benchmark BSE Sensex index.  CATCH LATEST STOCK MARKET UPDATES LIVE 

Around 91.5 million shares have changed hands on the counter on the BSE thus far in the session as against a two-week average volume of 110.8 million shares.

 

Notably, Vodafone Idea shares hit a seven-month high of ₹8.97 per share on September 23, in anticipation that the Government would come up with a resolution plan to support the dilapidated financial condition of the company.

 

During the previous hearing in the adjusted gross revenue (AGR) case on September 19, the Department of Telecommunications (DoT) had informed the SC that the Government firmly believed that "some solution has to be found" regarding Vodafone's plea seeking directions to set aside the telecom department's additional demand for AGR.

 

The DoT had asked Vodafone Idea to pay ₹9,450 crore as additional AGR dues. Of this, DoT said Vi owes ₹2,774 crore as dues for the merged entity (FY18-19) and ₹5,675 crore as dues for the pre-merged entity. Vodafone Group and Idea Group merged in 2018.

 

On its part, Vi requested the SC to set aside the order, saying that it goes beyond the scope of the top court's previous ruling on AGR liabilities.