Business / Vodafone Idea loses ₹2,700 crore in market cap after Birla's letter emerges

New Delhi: Shares of Vodafone-Idea Ltd on Tuesday, 3 August, hit a 52-week low of Rs 7.17 on the BSE and finally ended 10 percent lower at Rs 7.40 at the close of trading, Business Standard reported.

This comes a day after it became known that Kumar Manglam Birla, the chairman of Aditya Birla Group, had written to the cabinet secretary saying that he is ready to handover his stake in Vodafone-Idea to any government entity.

According to NDTV, the company lost over Rs 2,700 crore in the market cap on Tuesday.

WHAT DID BIRLA'S LETTER SAY?

In a letter to Cabinet Secretary Rajiv Gauba on 7 June, Birla wrote that, with a "sense of duty" towards 27 crore Indians connected with Vodafone-Idea, he was willing to handover his stake to a public sector unit (PSU), a government entity or any domestic financial entity, or any other entity that the government may consider worthy of keeping the company as a going concern.

Birla said that VIL had been trying to raise Rs 25,000 crore to sustain operations and pay regulatory and governmental dues, reported IANS.

He said that foreign investors wanted to see a clear government intent to have a three-player telecom market.

In the letter, Birla sought clarity on adjusted gross revenue (AGR), adequate moratorium on spectrum dues and floor pricing adding that without immediate and active government support VIL's operations will be at an "irretrievable point of collapse".

He also said that investors have also sought clarity on these issues, according to IANS.

Birla said that he and his team would be more than happy to work with the government to urgently explore all possible options to save the company and without any consideration to our private interest, Birla said.

THE AGR DUES ISSUE

The Supreme Court on Friday, 23 July, had dismissed a plea by telecom companies seeking correction of alleged errors in Adjusted Gross Revenue (AGR) calculation.

A bench headed by Justice L Nageswara Rao said all applications filed by Vodafone Idea, Bharti Airtel, and Tata Tele Services Ltd alleging arithmetical errors in calculation of AGR dues payable by them had been dismissed.

The top court, citing an earlier order in the matter, had noted the order clearly pointed out that no re-assessment of AGR-related dues can be done, reported IANS.

In September last year, the top court had given 10 years' time to telcos, who were struggling to pay Rs 93,520 crore in AGR dues outstanding amount to the government.

The apex court had said that telecom operators shall make the payment of 10 percent of the total dues as demanded by DoT by 31 March 2021. The bench had said the rest of the amount was to be paid in yearly instalments commencing from 1 April 2021 to 31 March 2031.