Vodafone Idea, Airtel share price rises on hopes of assistance from the government.
Harbinger of Hope: Shares of telecom operators Vodafone Idea and Airtel today soared on the back of hopes that the government would step in to help the ailing sector.
On a conference call with analysts, Vodafone Idea Chief Executive Officer Ravinder Takkar said he saw no conflict in the government’s ability to provide relief to telecoms companies. This sent Vodafone Idea share price up c. 20% before it closed at INR3.75 (+27.12%)
Shares of Bharti Airtel rose over 8% before closing at INR396 (+9.24%). Reuters
The development comes days after Vodafone India's CEO said that unless the government eases off on some of the demands on mobile spectrum fees, the company risks liquidation. However, even before it can think of liquidating its India business, Vodafone has to face a behemoth tax case worth INR22,100cr.
Flashback: Vodafone had purchased 67% stake in Hutchison Essar twelve years back. In 2007, the Indian Income Tax department slapped a demand notice seeking INR8,000cr in capital gains tax. With penalty and interest included, the tax claim now amounts to INR22,100cr and as per resolution professionals, all pending litigation has to be wrapped up before liquidating a company. Business Insider
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