Vodafone Idea shares hit fresh low for 3rd day in row, stock down 24.5%- check whats triggering downfall
Nothing seems good for the third-largest telecom company as the non-executive chairman Kumar Mangalam Birla on Wednesday after markets tendered his resignation from being at the helm of the Vodafone Idea, with effect from August 4, 2021.
The cash-strapped Vodafone Idea (Vi) shares plummeted 24.5 per cent on Thursday to touch a fresh 52-week low of Rs 4.55 per share on the BSE intraday on Thursday. The stock hit a new low for the third straight session today and has slumped around 45 per cent from Rs 8.25 per share this week.
Nothing seems good for the third-largest telecom company as the non-executive chairman Kumar Mangalam Birla on Wednesday after markets tendered his resignation from being at the helm of the Vodafone Idea, with effect from August 4, 2021.
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"The Board of Directors of Vodafone Idea, at its meeting held today, has accepted the request of Kumar Mangalam Birla to step down as Non-Executive Director and Non-Executive Chairman of the Board with an effect from close of business hours on 4 August 2021," Vi said in a regulatory filing.
Birla, earlier on Monday, had apparently told the government that he is willing to give up his promoter stake in Vodafone India. According to a PTI report, Birla, on June 7, 2021, in a letter to Union Cabinet Secretary Rajiv Gauba had expressed willingness to offer his group’s 27 per cent stake in VIL to any government or domestic financial entity in order to keep the stressed telecom company alive.
Similarly, adding to the telco’s woes, the Vodafone Group CEO Nick Read in a July 23 analyst call had also said that Vi is navigating through difficult times and the group is providing ‘practical support’, and it will not invest fresh equity.
The counter has been on a continuous decline since the Supreme Court rejected the telecom pleas regarding recomputing of AGR (adjusted gross revenue) dues. The stock since Supreme Court’s verdict on the AGR plea has declined almost 53.3 per cent from Rs. 9.75 per share from July 22, 2021.
The VIL debt has more than trebled in the last four years to Rs 1.6 lakh crore as of the end of March 2021, from around Rs 37,000 crore in FY16, which includes deferred spectrum obligations and adjusted gross revenue (AGR) liabilities.
The stock almost all July was trading higher, however, it started to decline after the Supreme Court’s AGR dues plea rejection. The stock had hit a record low of Rs 2.61 per share in November 2019.
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