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Last Updated : Jan 17, 2020 09:31 AM IST | Source: Moneycontrol.com

Vodafone Idea, Bharti Infratel plunge 13-39% after the AGR blow

According to Edelweiss, Bharti Airtel would be able to repay the dues and gain market share, and maintain positive stance on Bharti & Reliance Jio.

 
 
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Shares Vodafone Idea plunged 39 percent, while Bharti Infratel share prices slipped 13 in early trade on January 17 after the Supreme Court, on January 16, dismissed a review petition filed by telecom companies seeking relief from the Adjusted Gross Revenue (AGR) verdict.

Telecom companies, including Bharti Airtel, Vodafone Idea, had sought a relief on interest and penalty payments. RailTel, the only PSU in the sector, had also filed a review petition.

"It is a big shock for Vodafone Idea and Kumar Mangalam Birla. The Chairman of Vodafone Idea already said that they would shut shop if they don't get a relief in AGR case," Nitin Soni of Fitch Ratings told CNBC-TV18.

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Earlier this week, Bharti Airtel completed a massive fund raising exercise worth $3 billion through QIP and FCCB route as the telecom operator has been preparing for payment of statutory dues of more than Rs 35,000 crore.

Also Read - Experts believe telecom could become a two-player market after SC dismisses telcos AGR review plea

According to Edelweiss, Bharti Airtel would be able to repay the dues and gain market share, and maintain positive stance on Bharti & Reliance Jio.

However, the telecom companies may file a separate petition seeking a payment extension, it added.

In total, 15 telecom companies would have to pay dues worth Rs 1.47 lakh crore. After this judgement, it clearly indicated that they have to make a payment of license fee dues by January 23, 2020.

Citi expects a sharp negative reaction in shares of Vodafone Idea & Bharti Infratel on AGR Judgment.

The situation precarious for Vodafone Idea given the liability equates to >2x os its current market capital. Companies have the option to file a curative petition with a wider bench and may approach government for an extension of payment timelines, said Citi.

According to Credit Suisse the risks to telecom exposure increases once again and net debt-to-EBITDA for Vodafone Idea would be elevated at > 8x.

On the other hand, several non-telecom public sector undertakings (PSUs) like GAIL, DMRC, Power Grid and RailTel were affected as the DoT wrote to them seeking repayment of AGR fee dues. These companies would likely file fresh review pleas. The total dues that the non-telecom PSUs are staring at comes up to a total of around Rs 4.6 lakh crore.

At 09:18 hrs Bharti Infratel was quoting at Rs 218.35, down Rs 24.50, or 10.09 percent and Vodafone Idea was quoting at Rs 5.13, down Rs 0.90, or 14.93 percent.

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First Published on Jan 17, 2020 09:30 am
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