Beleaguered wireless carrier Vodafone Idea will pay Rs 3,500 crore ($490 million) in telecom dues to the government by the end of this week, the company said on Monday. Vodafone Idea shares fell nearly 15 per cent on Tuesday, a day after hopes that the private sector telecom company could outlive the financial squeeze due to the outstanding payments helped its shares post their best intraday gain since January 21 before ending flat.
"While there is a concern that Vodafone is against the wall, there is a slim hope that they will get through," said Siddhartha Khemka, head of research at Motilal Oswal Financial Services in Mumbai.
On Monday, a lawyer for the company said Vodafone Idea would pay Rs 3,500 crore in dues to the government by February 21. The lawyer declined to be named as the matter is still in court.
The government last week ordered mobile carriers to immediately pay billions of dollars in dues after the country's top court threatened the companies and officials with contempt proceedings for failing to implement an earlier ruling.
Vodafone Idea, a venture between the Indian unit of Britain's Vodafone Group Plc and billionaire Kumar Mangalam Birla's Idea Cellular, said its board had approved a payment of Rs 2,500 crore to the government that would be made on Monday itself.
A further Rs 1,000 crore will be paid before the end of the week, the company said.
Vodafone Idea also said its application on Monday to the Supreme Court to direct the telecom department to refrain from taking "coercive steps" to recover the dues was "not entertained".
The company owes roughly $3.9 billion to the government in dues, interest and penalties.
The country's telecoms ministry did not respond to an email seeking comment.
Rival Bharti Airtel said on Monday it had made a payment of Rs 10,000 crore towards the dues.
Analysts covering the country's telecoms sector say Vodafone Idea is the most fragile of its three major wireless carriers and if it shuts shop, the market would shape up as a duopoly of rivals Airtel and Reliance Industries' Jio.
Vodafone Idea has previously said its ability to continue as a business was contingent on the Supreme Court allowing it to modify issues such as payment timelines with the government.
At 10:53 am, the Vodafone Idea stock traded 9.06 per cent lower at Rs 3.11 apiece on the BSE, underperforming the benchmark Sensex index which was down 0.79 per cent amid a broad-based selloff.
The S&P BSE Telecom index - comprising 13 stocks including Bharti Airtel - was down 1.87 per cent at the time, having pared some of the losses after declining as much as 1.97 per cent during the session.
($1 = Rs 71.4150)
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