In the past seven trading days, the stock has tanked 42 per cent after the Supreme Court dismissed the petitions of telcos seeking a staggered option to pay their Adjusted Gross Revenue (AGR) related dues.
According to a report by The Economic Times, the government is unlikely to invoke Vodafone Idea’s bank guarantees for now, even as the officials of the telecom and finance ministries met Cabinet secretary Rajiv Gauba to discuss ways to ensure that the sector retains three private players, officials said.
The Department of Telecommunications (DoT) has sought legal opinion including that of Solicitor General Tushar Mehta on whether to invoke bank guarantees of companies in case they fail to pay their full AGR dues before the next date of hearing on March 17. Any move to invoke or encash the bank guarantee would put the operation of highly-stressed Vodafone Idea at risk, Business Standard reported on Tuesday.
Meanwhile, the rating agency India Ratings and Research (Ind-Ra) on Tuesday downgraded Vodafone Idea’s long-term issuer rating to ‘IND B’ from ‘IND BBB-’ while maintaining it on rating watch negative (RWN).
“The RWN reflects significant uncertainties over the outcome of the modification application filed by telcos; the quantum of the AGR-related liabilities; and Vodafone Idea’s ability to pay the AGR dues. The RWN also reflects uncertainties over other liquidity events, such as the possible risk of accelerated payment of financial liabilities and likely delays in asset monetization”, Ind-Ra said in a press release.