Vodafone Idea shares tank 10%. Here's why

New Delhi: Shares of Vodafone Idea tanked as much as 10 per cent in early trade on Tuesday after Kumar Mangalam Birla offered to give up his stake in the company.Aditya Birla Group chairman Kumar Mangalam Birla has offered to transfer the group’s entire ownership in Vodafone Idea to the government in a last-ditch effort to keep the cash-strapped telco from collapsing.Shares of cash-strapped Vodafone Idea declined 10 per cent to 7.46 on Tuesday. The stock was trading at Rs 7.62 at 10 am. BSE Sensex was trading 291.88 points, or 0.55 per cent, higher at 53,242.51 at the same time. The scrip settled at Rs 8.25 on Monday.Birla, nearly two months ago, had offered to hand over a 27.66 per cent stake in the company to any public sector or domestic financial entity who could keep the company afloat, while asserting that without immediate government support, the telco would be driven to an irretrievable point of collapse.In a letter to Cabinet Secretary Rajiv Gauba, Birla said “It is with a sense of duty towards the 27 crore Indians connected by VIL, I am more than willing to hand over my stake in the company to any entity - public sector/government/domestic financial entity, or any other that the government may consider worthy of keeping the company as a going concern.”He further said potential foreign investors wanted the government to show clear intent of its keenness to have a three player telecom market.The letter predated last month’s Supreme Court order which dismissed the plea of Vodafone Idea and other telcos to permit rectification of ‘arithmetical errors’ in the computation of adjusted gross revenue (AGR) dues.

from Economic Times https://ift.tt/3frJaYx