In a troubling turn of events for the beleaguered telecom operator Vodafone Idea, shares plummeted over 9% to reach their 52-week low of ₹8.91 on Monday, October 7. This decline comes amid alarming reports that the Department of Telecommunications (DoT) has issued a notice alleging the company’s non-payment of crucial bank guarantees related to spectrum auction dues.
According to a report by The Economic Times, the notice from the DoT follows Vodafone Idea’s failure to submit the necessary bank guarantees on time for spectrum dues from auctions held prior to 2022. The promptness and transparency of the company’s financial maneuvers remain under scrutiny, though Mint has not independently verified these claims.
The report states that the bank guarantee was due in the latter half of September. As of now, Vodafone Idea has not fulfilled this obligation, raising serious concerns about its financial health.
The spectrum auction dues moratorium for Vodafone Idea, a company under the Aditya Birla Group umbrella, is set to conclude in September 2025. To secure its dues, the telecom giant must submit bank guarantees that amount to a staggering ₹24,700 crore in the upcoming months, as reported by an official source.
In a notable strategic move, Vodafone Idea previously requested the DoT for an exemption from submitting bank guarantees. While recent regulations waive this requirement for airwaves procured from auctions after 2022, older guidelines mandate that companies provide a guarantee equating to one annual payment for spectrum acquisitions.
Stock Price Performance
With these developments, Vodafone Idea’s stock price has experienced significant turbulence, trading down at ₹9.18 on the Bombay Stock Exchange (BSE) around 11:35 AM—marking a 6.33% decrease from the previous close. The stock has dramatically changed from its recent peak, reaching a 52-week high of ₹19.15 on June 28, 2024.
This downturn marks the fifth consecutive day of losses for Vodafone Idea, leading to an overall decline of 17% during this period, further compounding today’s losses. The stock’s erratic performance has left many investors anxious about the future.
Furthermore, on a year-to-date basis, the stock has experienced a staggering 44% loss, significantly eroding the wealth of investors who have placed their faith in the company. As Vodafone Idea grapples with these challenging circumstances, the path forward remains uncertain, leaving stakeholders eager for clarity on the company’s financial recovery strategies.
