Vodafone Idea reported a loss of Rs 50,921 crore in the second quarter due to adjusted gross revenue (AGR). Earlier, the company had a loss of Rs 4,947 crore in the second quarter of last year. This is the largest quarterly loss yet in India’s corporate history.
Earlier, Tata Motors had a loss of Rs 26,961 crore for the quarter ended December 2018. Vodafone said it now relies on government relief to continue the business. The company said in a statement, “The court’s order on the AGR issue has significantly affected the industry.”
Company can go bankrupt
On the day before the results were announced, the Aditya Birla Group had said that it would not invest more in the company if the government does not provide major relief on the liability of more than Rs 39,000 crore on adjusted gross revenue (AGR). In such a situation, Vodafone Idea will go bankrupt. Let us inform you that the Supreme Court’s decision on AGR came last month. For the first time since then, Aditya Birla Group officials have made a public statement on the option of declaring the company bankrupt.
Group agrees with Vodafone CEO
Also, the group official says that they agrees with the statement of Vodafone Group CEO Nick Reid. Vodafone Chief Executive (CEO) Nick Reid had said that India has been ‘very challenging for a long time’, but Vodafone Idea still has 300 million subscribers which is 30 per cent by market size. “There is a huge financial burden on the company due to adverse rules, excessive taxes and even more negative judgment of the Supreme Court,” he said.
Airtel has suffered so much
Bharti Airtel has suffered a major setback by the Supreme Court’s order to pay the dues. As per the results released on Thursday, the telecom company incurred a huge loss of Rs 23,045 crore in the July-September 2019 quarter. At the same time a year ago, the company had a profit of Rs 119 crore in the same quarter. However, the company said that the results could not be compared due to the new accounting system.
Vodafone Idea shares fall drastically
On Thursday, Vodafone Idea shares had fallen by 22 per cent. After this, it closed at the level of three rupees after falling by 18.92 percent i.e. 0.30 points. It opened at 3.35 in early trade, while Vodafone Idea shares closed at 3.70 on the previous trading day.
So the decline
Vodafone Idea’s stock fell drastically as the Aditya Birla Group said it would not invest further in the company if the government does not give a major relief to its liability of more than Rs 39,000 crore on adjusted gross revenue (AGR). In such a situation, Vodafone Idea will go bankrupt.