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With the Supreme Court dismissing the review petition filed by telcos against the adjusted gross revenue (AGR) ruling, investors have begun pricing in an effective duopoly in the industry. Shares of Vodafone Idea Ltd fell by 25% on Friday to ₹4.50 apiece.
“The company has no source of cash to pay the liabilities and was entirely dependent on payment relief. It has cash merely to continue operations for the next two-three quarters," analysts at Motilal Oswal Financial Services Ltd said in a note to clients.
Shares of Bharti Airtel Ltd, meanwhile, touched a 52-week high on Friday. The stock has gained by about 39% since the Supreme Court ruling on AGR dues in end-October. This is despite the fact that it is also liable to pay the government as much as ₹34,300 crore on account of the SC judgement.
The company recently raised $3 billion, which can be used to pay the AGR dues. Besides, investors are pricing in market share gains as a result of Vodafone Idea’s exit. The latter said its dues to the government stand at ₹44,200 crore.