Voda Idea shares fall for this reason
When Vodafone and Idea merged, it became the largest telecom company in the country. But now everyone knows about its status. The same is true of the company’s shares, which have fallen by more than 20 per cent in the last two trading sessions. Currently, the closing price of the company’s shares is around Rs 10. So, what is causing the company’s shares to fall and when will they improve?
The main reason for the recent fall in Vodafone-Idea shares is a Supreme Court decision. The company had filed a remedial petition before the Supreme Court in the Adjusted Gross Revenue (AGR) matter, but the Supreme Court refused to entertain its plea. Following this, Vodafone Idea will now have to pay dues of around Rs 70,300 crore to the government. The company’s own estimate regarding AGR dues is around Rs 35,400 crore.
63,05,98,03,922 shares are present in the market
Vodafone Idea is already burdened by a huge debt. On the contrary, the company had recently also issued its FPO so that it could raise some money to improve its financial condition. The effect of this was that now 63,05,98,03,922 (Rs. 6,305 crore) shares of the company are present in the market. Its total market capitalisation is slightly higher than what the company owes to the government. This amount is Rs. 71,304.75 crore.
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Looking at these company figures, most market experts claim that the company’s stock is currently facing tough times. A report by Nomura India says that this is the worst phase for Vodafone Idea, which is now being left behind. However, other experts do not seem to be unanimous on this matter.
According to a Business Standard report, Nomura has given it a ‘buy’ rating. While Nuvama Institutional Equities has given it a ‘hold’ rating, JM Financials ‘sell’ and Goldman Sachs has given it an ‘underperform’ rating.
Birla bought shares worth Rs 1.86 crore
Vodafone Idea promoter Kumar Mangalam Birla recently bought 1.86 crore shares of the company. Pilani Investment also bought 30 lakh shares. Despite this, Goldman Sachs has not made any change in the rating of the company’s stock. The reason for this is the excessive availability of the company’s shares in the market. The promoters’ purchase of 1.86 crore shares out of the company’s 6.305 crore shares does not seem to make much difference to its availability in the market.
