Voda Idea falls 9% after chairman says will shut in absence of govt relief

The Bombay Stock Exchange (BSE) has sought clarification from Vodafone Idea about Birla's comment

Shares of Vodafone Idea slumped 9 per cent to Rs 6.66 on the BSE on Friday after its chairman Kumar Mangalam Birla said the company will shut down if the government does not provide relief on the liability it faces in past statutory dues following a Supreme Court order.

The Bombay Stock Exchange (BSE) however said, the exchange has sought clarification from Vodafone Idea about Birla's comment. The company is yet to reply.

Market leader Bharti Airtel, Vodafone Idea and other telecom players have to pay as much as Rs 1.47 trillion in payment of telecom license fee and spectrum usage charge together with interest and penalty for past 14 years. Both Airtel and Vodafone Idea have petitioned the government for relief in waiver of interest and penalty, which will halve the dues, and also filed a review petition in the Supreme Court.

"If we we are not getting anything then I think it is end of story for Vodafone Idea," Birla said at the HT Leadership Summit when asked about the future of Vodafone Idea in absence of a government relief on payment of Rs 53,038 crore dues.

"It does not make sense to put good money after bad. That would be end of story for us. We will shut shop," he said in a response when asked if Vodafone Idea will put in more money.

Birla's Idea Cellular and British telecom giant Vodafone plc's India unit had merged last year to compete with the onslaught of free voice calling and dirt cheap data unleashed by richest Indian Mukesh Ambani's Reliance Jio. In the process, it accumulated Rs 1.17 lakh crore debt and had just weeks back posted corporate India's biggest loss of Rs 50,900 crore (in September quarter) after it provisioned for the liability arising from the Supreme Court upholding the government's position on what base should statutory liabilities be calculated.

At 2 PM, the stock was down 7 per cent at Rs 6.83 as compared to the 0.7 per cent dip in the benchmark S&P BSE Sensex. A total of 41.9 crore shares had changed hands on the NSE and BSE combined.