CHENNAI: Telecom major Vodafone Idea Ltd (VIL) recorded a steep drop in share prices after the company mentioned in its Q4 results that its ability to continue as a going concern depended on its ability to raise funds from investors and the outcome of key appeals filed with the Supreme Court and the Department of Telecom.
VIL stock prices consequently fell as much as 15 per cent on the BSE on Thursday morning, before recovering a little to close the trading session down by 8.84 per cent.
“There exists material uncertainty relating to the Group’s ability to continue as a going concern which is dependent on its ability to raise additional funds as required, successful negotiations with lenders on continued support, refinancing of debts, monetisation of certain assets, outcome of the modification application filed with the SC and clarity of the next instalment amount, acceptance of its deferment request by DoT and generation of cash flow from operations that it needs to settle/renew its liabilities/guarantees as they fall due,” notes attached with the financial results said.
Investors also seem to have been spooked by the low average revenue per user (ARPU) figures seen during the quarter, which indicates a critical need to increase tariffs.
On Thursday, rival Bharti Airtel’s chairman Sunil Mittal said at an event that there was tremendous stress in the telecom sector and that tariffs have to be increased.