Vodafone Idea Awaits a Lifeline, But Who Will Come to Beleaguered Operator’s Rescue?

Vodafone Idea
Telecom operator Vodafone Idea Ltd (VIL) is the eye of the storm, yet again, this time following the resignation of industrialist and billionaire Kumar Mangalam Birla from the debt-laden company’s board.

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On Wednesday, Birla, the chairman of business conglomerate Aditya Birla Group, had stepped down as non-executive chairman and non-executive director of VIL, a move that did not go well with the investors. While the company named non-executive director and telecom veteran

Himanshu Kapania as non-executive chairman, the markets read it as a signal that the businessman was distancing himself from the beleaguered mobile service provider.

This resulted in its shares plunging by 24.54 per cent to its 52-week-low of Rs 4.55 during early trading on the BSE. Later, the shares closed down 1.49 per cent at Rs 5.94 on the main BSE bourse on Thursday.

Troubles Galore

The recent troubles for VIL, which is weighed down by debt of Rs 1.8-lakh-crore debt, started with a series of events, and Birla’s resignation is the latest one in the chain.

Earlier on June 7, 2021, Birla had offered to hand over Aditya Birla Group’s entire stake in the company to any public sector or domestic financial entity to keep the firm afloat. In case of government declining support, the company’s operations would be driven to “an irretrievable point of collapse”, Birla said in a letter.

This evokes a sense of deja vu.

Earlier in 2019, there were reports that the beleaguered airline Jet Airways had also sought for a similar bailout, but the government turned Nelson’s eye. However, there were promises of providing bank funding for the embattled carrier, which also didn’t materialise.