Why Vodafone Idea's stock is down 4% from its peak

In response to a report citing sources that indicated the telecom operator has not obtained any respite from the government over the Rs 6,090 crore bank guarantee (BG) that it was required to deliver today, Vodafone Idea Ltd. shares fell 4% from the day's peak.According to reports cited by CNBC Awaaz, the telecom operator requested relief upon delivering this bank guarantee but has not received any. Subject to specific terms and conditions, DoT waived the need for financial bank guarantees for spectrum purchased at spectrum auctions in 2012, 2014, 2015, 2016, and 2021 in its notification of December 27, 2024.From a day's high of Rs 7.64 to a day's low of Rs 7.27 a share, the stock dropped 3.7%. In the last year, the stock has dropped 48%. For the 2012, 2014, 2016, and 2021 auctions, Vodafone Idea had previously anticipated that VIL would not be needed to supply any BGs out of the five auctions listed.

The NPV of all payments paid would, however, be less than the prorated value of the spectrum used, resulting in a one-time partial shortfall only for the 2015 auction. To find out the precise amount of this partial shortfall for the 2015 auction, we are negotiating with the DoT," VIL stated in December 2024.For the aforementioned auctions, VIL was required to provide BGs totaling Rs 24,800 crore against each spectrum installment 13 months before the installment was due. "The government has supported the industry by waiving the bank guarantee. As stated by Vodafone Idea CEO Akshaya Moondra following the company's February 12 results call, "We are working towards closure of debt funding for the execution of our long-term network expansion plan."