SHARES of Vodafone Idea crashed over 27 per cent on Thursday (24) after the Supreme Court allowed the Indian government’s plea to recover adjusted gross revenue (AGR) of about Rs 920 billion from telecommunication service providers in the country.
Vodafone Idea plummeted 23.36 per cent to close at Rs 4.33 on the Bombay Stock Exchange (BSE).
During the day, it tanked 27.43 per cent to Rs 4.10 its 12 months low.
Led by the sharp fall in its shares, Vodafone Idea witnessed an erosion of Rs 37.9258 billion from its market valuation which is now at Rs 124.4242bn.
Bharti Airtel also tumbled 9.68 per cent to Rs 325.60 during the trade. But, later it bounced back and closed 3.31 per cent higher at Rs 372.45.
In a setback to telecom service providers, the Supreme Court on Thursday allowed the government’s plea to recover AGR of about Rs 920bn from them.
Industry body- Cellular Operators Association of India (COAI) said the ruling will deal a “disastrous blow” to the industry, given its precarious financial condition.
The decision will have a big impact on the sector as it is already in the state of huge financial distress, Prashant Singhal, Emerging Markets TMT Leader, EY, said.
Bharti Airtel on Thursday said the Supreme Court verdict on adjusted gross revenue will weaken viability of telecom sector, and the government must review its impact and find ways to mitigate financial burden on the already stressed industry.