Vodafone Idea Shares Fall Over 3% After Supreme Court Plea Over US$5 Billion Dues

Vodafone Idea's share price dropped 3.12% on Monday, May 19, at 12:57 PM after the company filed a plea in the Supreme Court. The fall came after the telecom company challenged the Indian government’s decision to deny relief on over US$5 billion in interest and penalties related to past dues.

Government Refuses to Waive Penalties

According to news reports, the Department of Telecommunications (DoT) rejected a request made by Vodafone Idea on April 29. The company had asked for the interest and penalties to be waived, warning that its future could be in danger.

In its response, the Communications Ministry said, “The request cannot be considered,” denying any relief despite the company’s financial troubles.

Vodafone Idea Moves Supreme Court 

After the rejection, Vodafone Idea—owned jointly by the UK-based Vodafone Group and India’s Aditya Birla Group—approached the Supreme Court. The company is now seeking a directive from the court asking the government to act in the public interest, given the importance of the telecom sector.

The case is expected to be heard later this week.

Longstanding Financial Struggles of Vodafone Idea

Vodafone Idea has been under financial stress since a 2019 Supreme Court ruling expanded the definition of Adjusted Gross Revenue (AGR). This significantly increased the amount telecom companies owed to the government.

Although the government converted part of Vodafone Idea’s dues into equity, giving it a 49% stake, the company continues to face major financial challenges.

Q4 Results Show Heavy Losses

In its Q4 FY24 results, Vodafone Idea reported a net loss of ₹7,674.6 crore, up from ₹6,418.9 crore in Q4 FY23. Compared to the previous quarter, the loss increased by 9.85%.

Finance costs jumped by 25.5% year-on-year to ₹6,280.3 crore. For the full year FY24, the company’s total loss widened to ₹31,238 crore, compared to ₹29,301 crore in FY23.

Conclusion 

With rising losses and no relief from the government, Vodafone Idea’s future remains uncertain. The Supreme Court’s decision could prove crucial for the company’s survival.

Read more on: Vodafone Idea Warns of Imminent Insolvency Without Government Support. 
 
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