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Vodafone Idea Ltd. saw its shares dip on Monday, March 10, after the company failed to receive any relief from the government regarding the ₹6,090 crore bank guarantee it must submit by the end of the day. The telecom company’s stock, which had been performing well earlier in the day, declined following this news.
Deadline Looms for Bank Guarantee Submission
The Department of Telecom (DoT) had demanded this bank guarantee from Vodafone Idea for the spectrum the company acquired after 2015. With today marking the final deadline for submission, the company faces a significant financial obligation, which could put additional pressure on its already strained financials.
No Government Relief for Vodafone Idea
Despite seeking relief on submitting the bank guarantee, Vodafone Idea has not received any favorable response from the government, sources said. This has added to the financial burden as the company must now arrange for the full ₹6,090 crore by the close of business today.
HSBC Lowers Rating, Analysts Bear a Grim Outlook
In light of these financial challenges, HSBC recently downgraded its outlook on Vodafone Idea, maintaining a “reduce” rating and slashing its price target to ₹6.5 per share from ₹7.1, indicating a potential downside of 17.3%. Of the 21 analysts covering the stock, only four have a “buy” rating, while 12 recommend selling and five suggest holding the stock.
Stock Performance and Market Sentiment
Vodafone Idea’s shares are currently down 0.5%, trading at ₹7.5, just above its 52-week low of ₹6.61. The continued pressure from both regulatory obligations and market sentiment has raised concerns about the company’s future performance and investor confidence.
