Vodafone Idea shares plunge 9%, hit 52-week low amid reports of notice from DoT over non-submission of bank guarantee

Shares of beleaguered telecom player Vodafone Idea tumbled over 9 per cent to their 52-week low of ₹8.91 on Monday, October 7 amid reports that the Department of Telecommunications (DoT) has issued a notice to the company over the non-payment of bank guarantees required to cover past spectrum auction dues.

According to a report by The Economic Times, the latest notice was issued after the company failed to submit bank guarantees on time for past spectrum dues for auctions held before 2022. Mint could not independently verify this report.

As per the report, the bank guarantee was due in the second half of September, which the company has not yet submitted.

The moratorium, for spectrum auction dues for the Aditya Birla-led group company ends in September 2025 and the bank guarantees need to be submitted at least a year in advance for securing the dues. Vodafone Idea needs to submit bank guarantees worth ₹24,700 crore to the government in the coming months, the report quoted an official as saying.

Vodafone Idea had earlier asked the DoT to be exempted from submitting bank guarantees. While companies no longer need to provide guarantees for airwaves bought in auctions from 2022 onwards, previous rules required them to submit a guarantee equal to the cost of one annual payment.

Stock Price Performance

Amid this backdrop, Vodafone Idea share price was trading with deep cuts today. However, it recovered from the day’s low to trade at ₹9.18 apiece on BSE, down 6.33 per cent around 11.35 am. The stock had hit a 52-week high of ₹19.15 on June 28, 2024.

Today is the fifth consecutive day of losses for Vodafone Idea share price. The stock has tumbled 17% during this period, including today’s losses from the day’s lows.

On a year-to-date basis, the stock has lost 44 per cent, significantly eroding investors' wealth.