Shares of Vodafone Idea fell as much as 13 per cent to hit an intraday low of Rs 7.17 after its promoter and Aditya Birla group Chairman Kumar Mangalam Birla offered to hand over his stake in debt-laden Vodafone Idea to the government or any other entity that the government may consider worthy to keep the company operational.
Vodafone Idea's gross debt, excluding lease liabilities, stood at Rs 1.80 lakh crore as of March 31, 2021. The amount included deferred spectrum payment obligations of Rs 96,270 crore and debt from banks and financial institutions of Rs 23,080 crore apart from the AGR liability.
The billionaire businessman made the offer in June in a letter to Cabinet Secretary Rajiv Gauba.
Vodafone Idea along with Bharti Airtel had approached the Supreme Court for correction in the government calculations but their plea was rejected.
"It is with a sense of duty towards the 27 crore Indians connected by Vodafone Idea, I am more than willing to hand over my stake in the company to any entity- public sector/government /domestic financial entity or any other that the government may consider worthy of keeping the company as a going concern," Mr Birla said in the letter.
What it means for retail investors in Vodafone Idea:
"Vodafone has huge debt, their net worth is negative Rs 38,000 crore the company has been consistently making losses and turning it around is not an easy jobs as both promoters do not want to bring in fresh capital. In this situation hope cannot be the only thing to remain invested in a stock. There are many business which have gone out and here also it is better that if investors get something they should exit," AK Prabhakar, head of research at IDBI Capital told NDTV.
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