Stock Fundamentals

Why did Vodafone Idea tank 23% in a day?

Bavadharini KS | Updated on February 16, 2020 Published on February 16, 2020

The stock of Vodafone Idea tanked 23 per cent last Friday on the back of the Supreme Court order asking telecom companies to pay up their AGR (Adjusted Gross Revenue) dues.

In a huge blow to telecos, which already saddled with huge debt, the court rejected the players’ plea to make staggered payments on AGR dues. For Vodafone Idea, the pain is accentuated by the fact that the company reported a net loss of ₹6,438.8 crore in its December quarter result. Its revenue also declined to ₹11,089.4 crore from ₹11,764.8 crore in the same period last year.

While the tariff hikes made by the company across voice and data services have helped improve ARPU (average revenue per user growth of 22 per cent y-o-y to ₹109), it has not aided the top-line much.

 

The company’s AGR dues are over ₹53,000 crore. It is also highly leveraged with a net debt of ₹1,03,300 crore as of December 2019.

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Published on February 16, 2020
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