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Vodafone Idea share price ends 4% higher amid reports of capital constraints

As per SBICAP Securities, a default will make Vodafone Idea's case weak in the Supreme Court, which has been worried about the company's ability to pay AGR dues.
Jul 10, 2020 / 11:45 AM IST

Vodafone Idea share price jumped 4.06 percent to settle at Rs 9.75 on BSE on July 10 amid reports that the company was experiencing capital constraints.

A CNBC-TV18 report said capital constraints at Vodafone Idea was restricting payment to some vendors. Vodafone Idea's teams were in talks with tower companies to explain the backlog and issues.

The delay in payment was on account of liabilities and was expected to be temporary, CNBC-TV18 reported.

Payment for July and June may be done together by August 3, the report said.

As per SBICAP Securities, any default will make Vodafone Idea's case weak in the Supreme Court as the top court has been worried about the company's ability to pay AGR dues.

The company reported Rs 73,878 crore of net loss in fiscal ended March 2020, the highest ever by an Indian firm, after it provisioned for Supreme Court mandated statutory dues.

The firm, which has to pay Rs 51,400 crore dues after the court ordered the non-telecom revenues to be included in calculating statutory dues, said the liability had "cast significant doubt on the company's ability to continue as a going concern".

Read more: Vodafone Idea posts highest-ever loss by an Indian firm at Rs 73,878 crore in FY20

According to a report by Emkay Global, wireless revenues of telecom companies Bharti Airtel and Vodafone Idea are expected to fall during the first quarter of the current fiscal on account of the nationwide lockdown.

Read more: Bharti Airtel, Vodafone Idea mobile revenues to fall in Q1 due to lockdown: Emkay Global Report
Moneycontrol News
first published: Jul 10, 2020 11:45 am
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