Vodafone Idea’s stock dropped more than 10% on Tuesday following allegations that Aditya Birla group Chairman Kumar Mangalam Birla has proposed to hand over his interest in the debt-ridden VIL to government agencies in order to keep the firm afloat. On the BSE, the shares dropped 10.30 percent to Rs 7.40. It fell 13.09 percent during the day to Rs 7.17, a 52-week low. It finished at Rs 7.40 on the NSE, down 10.30 percent.
In a letter to Cabinet Secretary Rajiv Gauba in June, the millionaire businessman made the offer.
VI had an adjusted gross revenue (AGR) obligation of Rs 58,254 crore, of which the company had paid Rs 7,854.37 crore and had Rs 50,399.63 crore outstanding, according to government data.
VI and Bharti Airtel had petitioned the Supreme Court to have the government’s estimates corrected, but their request was denied.
Investors are unable to engage in VI without clarity on AGR liability, an adequate moratorium on spectrum payments, and, most significantly, a floor pricing regime above the cost of service, according to Birla, who has roughly a 27% stake in the firm.
VI’s financial predicament will reach a “irreversible point of collapse” unless the government acts quickly on the three issues by July, according to Birla’s letter dated June 7.“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,” Birla wrote in the letter, “with a sense of duty towards the 27 crore Indians connected by VI.”