Vodafone Idea (Vi) stock took a massive hit on Thursday as shares nosedived 15 percent at Rs 5.13 after the telecom company announced the decision of Kumar Mangalam Birla stepping down as non-executive director and non-executive chairman, who offered to give up his stake in the debt-ridden telecommunications (telecom) company.
The shares touched a fresh 52-week low in the BSE intra-day trade on the back of this announcement, which came into effect from the close of business hours on Wednesday.
EXPLAINED | Why Kumar Mangalam Birla Resigned As Chairman of Debt-Ridden Vodafone Idea
Himanshu Kapania, a nominee of the Aditya Birla Group, has been appointed as the non-executive chairman. On Wednesday, Vodafone Idea shares tanked as much 18.51 percent to Rs 6.03 in a firm Mumbai market on Wednesday, valuing the telco at Rs 17,327 crore.
Investors have lost over Rs 22,000 crore in Vodafone Idea shares since January this year.
“The Board of Directors of Vodafone Idea Limited, at its meeting held today, have accepted the request of Mr. Kumar Mangalam Birla to step down as Non-Executive Director and Non-Executive Chairman of the Board with effect from close of business hours on 4th August 2021,” Vodafone Idea said in an exchange filing on Wednesday, August 4, 2021.
Birla holds around a 27 percent stake in Vodafone Idea Ltd., one of three private-sector competitors, left standing in a field of a dozen, is on the verge of collapsing under the weight of its $30 billion debt, including AGR dues of $6 billion.
In July, Supreme Court rejected petitions by telecom companies seeking a reassessment of how much they owe the government, seeking relief in a $14 billion AGR dispute that threatens the survival of cash-strapped Vodafone Idea Ltd.
A collapse of Vodafone Idea effectively creates a duopoly in the country of 1.4 billion people’s wireless market, with Mukesh Ambani led Reliance Jio as the market leader and Sunil Bharti Mittal led Bharti Airtel as the second-largest operator.
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