Vodafone Idea Limited, a debt -driven telecom company, may not last long and be bankrupt. This is not our point but the company itself is saying. Vodafone Idea has warned the government that it cannot work after fiscal year 2025-26 without government support. He will have to contact the National Company Law Tribunal (NCLT) for bankruptcy.
Vodafone IDEA says that due to lack of government support, the value of the government’s equity share could be zero. As a result, a spectrum of Rs 1.18 lakh crore will be recovered from the company. The company also claimed that even though the equity investment of Rs 26,000 crore and the government acquired stake in the company, it has not received any support from the banks.
Bank funds cannot go ahead without government assistance
Vodafone Idea told the government that without its support, bank funds could not go ahead and the company could not work after FY 26. If the government does not get help and Vodafone Idea fails to pay its adjusted gross revenue (AGR) balance, the company will be forced to contact the NCLT, which may be a long process.
More than 20 million customers can be affected
If Vodafone Idea goes to NCLT, more than 200 million customers may be affected. Disruption of Vodafone Idea’s network will also have a big impact on other fields and can blow the country’s digital ambitions. Vodafone Idea has given a stake to the government by converting its spectrum responsibilities into equity. Now the government has 49% equity stake in the company. The company has still paid Rs. 1.95 lakh crore is yet to be paid.
Vodafone Idea has more than 59 lakh small shareholders, or it can be said that there are shareholders whose official share capital is up to Rs 2 lakh. The company’s market cap is close to Rs 80000 crore. On May 16, the company’s share was up by about 2 per cent on BSE to Rs. Closed at 7.37.
Appeal to Supreme Court for further relief in AGR balance
The day before, the news came that Vodafone Idea filed a new petition in the Supreme Court to get more relief in its AGR balance. The company mentioned the previous decision on AGR in its application and sought to waive the outstanding payments of over Rs 30,000 crore. The company has sought penalty and interest forgiveness on a penalty component, especially in AGR Level.
Vodafone Idea argues that the government cannot provide further relief due to the limits imposed by the AGR judgment. Referring to the difficulties in the telecom sector, Vodafone Idea claims that the sector will be ruined without additional government support. The company has requested the Supreme Court for immediate hearing on the matter. The hearing is scheduled for May 19.
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