Vodafone Idea shares: Why VIL stock is down 4% from day's high

Shares of Vodafone Idea Ltd declined 4 per cent from day's high amid a report quoting sources suggesting that the telecom operator has received no relief from the government with respect to the Rs 6,090 crore bank guarantee (BG) that it was needed to submit today.

The telecom operator had sought relief on submitting this bank guarantee, but has not received any, CNBC Awaaz quoted sources as saying. DoT vide its communication dated December 27, 2024, dispensed with the requirement of submission of financial bank guarantees for the spectrum acquired in spectrum auction held in 2012, 2014, 2015, 2016 and 2021, subject to certain terms and conditions.

The stock fell 3.7 per cent from day's high of Rs 7.64 to hit a day's low of Rs 7.27 apiece. The scrip is down 48 per cent in the past one year.

Vodafone Idea had earlier expected that out of all the five auctions mentioned, no BGs would be required to be provided by VIL for the 2012, 2014, 2016 and 2021 auctions.

"However, there would be a one-time partial shortfall only for the 2015 auction, where the NPV of all payments made would be less than the pro-rated value of spectrum used. We are in discussion with the DoT to determine the final amount of this partial shortfall for the 2015 auction," VIL said in December 2024.

BGs aggregating to Rs 24,800 crore were required to be provided by VIL against each spectrum instalment, 13 months prior to the installment falling due for the above auctions.

"With the bank guarantee waiver, the government has showed support to the industry. We are working towards closure of debt funding for the execution of our long-term network expansion plan," Akshaya Moondra, CEO of Vodafone Idea, said post earnings call on February 12.

MOFSL last month said that with the government prepayments commencing from 1HFY26 and no break-through on debt raise, it felt that VIL is likely to face a cash shortfall and may not be able to meet the capex guidance of Rs 50,000-55,000 crore by FY27.