Vodafone Idea shares slump over 9% as govt rules out new relief

Vodafone Idea shares today: Shares of Vodafone Idea fell sharply in early trade on August 26, plunging over 9 per cent, as investors engaged in heavy profit booking following comments from the Telecom Ministry dismissing the possibility of any immediate additional relief for the debt-laden telecom operator.

The sell-off also impacted Indus Towers, which slipped 3.5 per cent in early trade. While Indus shares remain flat on a year-to-date basis, Vodafone Idea has now lost over 15 per cent YTD.

The sharp reaction comes a day after Minister of State for Communications, Pemmasani Chandra Sekhar, in an interview with Moneycontrol, stated that the government is not considering any further relief measures for Vodafone Idea beyond what has already been provided.

“We have recently converted a lot of their debt into equity. The government has done whatever we thought we could do, and at this time we don’t have any discussion or plan to change that,” Sekhar said.

His comments follow recent reports that the Department of Telecommunications (DoT) had proposed “multiple relief options” to the Prime Minister’s Office (PMO)—including a two-year moratorium on adjusted gross revenue (AGR) dues, interest and penalty waivers, and smaller repayment installments. However, Sekhar clarified that no such proposal has reached the PMO, to his knowledge.

The minister further stated that any further decision on relief would have to come from the Union Cabinet, involving the PMO, Finance Ministry, Telecom Minister Jyotiraditya Scindia, and the DoT.

Vi Seeks Clarity for Bank Funding

Vodafone Idea, which owes Rs 17,213 crore in principal AGR dues (till FY19), has requested the government to treat this as the final amount and waive interest and penalties. The company is also in talks with banks for fresh funding, but lenders are reportedly waiting for more clarity on the AGR situation.

CEO Akshaya Moondra, during the June quarter earnings call, said that Vi’s current focus is on business investment rather than altering the government's equity stake.

“Whatever capital is available, the focus will be on using it for investments that give the best returns,” Moondra said.

He also highlighted past instances of government support, including spectrum payment deferrals (2019), the 2021 telecom reforms, and the conversion of dues into equity in 2023 and 2025.

“These actions have generally occurred closer to deadlines. Our request this time is to resolve things ahead of March, so banks get clarity and funding can proceed,” he noted.