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SC verdict: Vodafone stock tumbles, loses USD 975 mn in market value

Shares of Vodafone Idea fell as much as 40 pc on Friday, losing $975 million in market value, after the Supreme Court rejected mobile carriers’ petitions for a review of its order to pay billions of dollars in levies to the government.

SC verdict: Vodafone stock tumbles, loses USD 975 mn in market value
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New Delhi

Domestic mobile carriers had filed petitions to review an October ruling by the top court that upheld a long-standing government demand that wireless carriers pay 920 billion rupees ($13 billion) in overdue levies and interest.

The court’s rejection on Thursday of petitions by Vodafone Idea, Bharti Airtel and the now-defunct Tata Teleservices is likely to add to the financial woes of India’s telecoms sector, which has been badly bruised by a price war.

It could also threaten the survival of Vodafone Idea, a joint venture between Britain’s Vodafone Group Plc and India’s Idea Cellular, as the unit is saddled with about $3.9 billion in overdue payments, the biggest portion of the entire industry levy. After the October ruling, its parent Vodafone Group had said the situation for its India venture was “critical.” “With Aditya Birla and Vodafone groups unwilling to infuse equity in Vodafone Idea, we see a strong possibility of Vodafone Idea going for bankruptcy,” analysts at Credit Suisse said in a note, while suspending their rating and target price on the stock.

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