Supreme Court rejects plea for relief on US$13 billion telco levy; Vodafone tumbles

Shares of Vodafone Idea fell as much as 40per cent on Friday, losing US$975 million in market value, after India's top court rejected mobile carriers' petitions for a review of its order to pay billions of dollars in levies to the government.

It could also threaten the survival of Vodafone Idea, a joint venture between Britain's Vodafone Group Plc and India's Idea Cellular, as the unit is saddled with about US$3.9 billion in overdue payments, the biggest portion of the entire industry levy. "With Aditya Birla and Vodafone groups unwilling to infuse equity in Vodafone Idea, we see a strong possibility of Vodafone Idea going for bankruptcy," analysts at Credit Suisse said in a note, while suspending their rating and target price on the stock."The probability of India transitioning to a two mobile-operator market has increased considerably," it said. It maintained an"Outperform" rating on Bharti Airtel stock.

The trio of Vodafone Idea, Bharti Airtel and Reliance Jio, which is backed by Asia's richest man, Mukesh Ambani, controls more than 90per cent of India's mobile market.

Source: News Formal (newsformal.com)

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