“While it may still be possible for the government to offer relief perhaps via some legislative/policy action if it so chooses, we are yet to see any such indication or willingness from the government,” the brokerage said in a client note, while retaining its neutral rating on the stock. “Given the heightened uncertainty, we find it hard to ascribe an equity value to the stock.” Vodafone Idea shares plunged 11 per cent to close at Rs 3.03 on Tuesday. Citigroup said Vodafone Idea’s prospects remain ‘extremely precarious’ with its net debt/operating profit at 20 times.
“The company has admitted that its ability to continue as a going concern remains at risk in the absence of relief on its over $6 billion AGR liability,” said Citi. “While some green shoots were visible in 3Q (+2 per cent qoq revenue growth, 4G sub adds accelerated, tariff hike benefits to be visible from 4Q), this could come to naught without any relief.”
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