Shares of Vodafone Idea and Bharti Airtel tumbled on Tuesday, with the former plunging up to 11.7 per cent, following reports that the committee of secretaries constituted to look at a relief package for the debt-laden and loss-making sector has been wound up. Vodafone Idea plummeted 11.70 per cent to close at Rs 6.04 on the BSE. During the day, it tumbled 16.66 per cent to Rs 5.70.
Shares of Bharti Airtel also dropped 4.34 per cent to close at Rs 431.70. During the day, it tanked 4.71 per cent to Rs 430.
Bharti Airtel shares also fell after Icra downgraded the company's long-term rating due to higher provisioning in its latest quarterly results following the Supreme Court judgement on adjusted gross revenue (AGR) and spectrum charges.
With the Cabinet allowing telecom operators to defer payments due for airwaves bought via auction until the end of March 2022, a committee of secretaries constituted to look at relief package for the debt-laden and loss-making sector has been wound up, a top source said.
The Committee of Secretaries was last month constituted to examine "all aspects" of "financial stress" faced by service providers such as Bharti Airtel and Vodafone-Idea Ltd and suggest measures to mitigate them.
The panel was constituted shortly after the Supreme Court upheld the government's position on including revenue from non-telecommunication businesses in calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.
Acting on its recommendations, the Cabinet on November 20 deferred spectrum payment dues from telecommunications companies for two years to help an industry ravaged by a year-long price war, mounting debt and the Supreme Court decision last month demanding Rs 1.4 lakh crore in overdue fees.
The decision to wind up the CoS follows the government's unwillingness to intervene in the Supreme Court-mandated statutory payments, sources said.