Mumbai: Despite a positive start, the Indian equity market plunged Friday after the Supreme Court initiated contempt proceedings against telecom companies for non-payment of Adjusted Gross Revenue (AGR) dues and directed them to pay the dues by March 17.
Following the order, banking stocks plunged, leading the decline across sectoral indices. Other sectoral indices were witnessed heavy selling included finance, auto and FMCG.
The BSE Sensex closed at 41,257.74, lower by 202.05 points, or 0.49 per cent, from itsprevious close of 41,459.79. It had opened at 41,510.19 points, touched an intra-day high of 41,702.36 and a low of 41,183.13 points.
The Nifty50 on the National Stock Exchange closed 61.20 points lower, or by 0.50 per cent, at 12,113.45.
Owing to the top court’s ruling, stocks of Vodafone Idea fell 23.21 per cent, or by Rs 1.04, on the BSE to Rs 3.44 per share. Vodafone Idea owes Rs 53,000 crore as AGR dues and there are concerns over the survival of the company if it has to pay the amount as per the court’s deadline.
The company reported a consolidated net loss of Rs 6,438.8 crore for the October-December quarter on Thursday, sating in its regulatory filing that “the company’s ability to continue as a going concern is essentially dependent on a positive outcome of the application for modification of the ‘Supplementary Order’ before the Supreme Court and subsequent agreement with DoT for the payment in installments after some moratorium and other reliefs.”
The other major telco which would be impacted by the order, Bharti Airtel, however informed the Department of Telecom (DoT) that it is currently in the process of completing a self-assessment exercise as per the earlier DoT direction on AGR quantum to be paid to the government and would deposit Rs 10,000 crore by February 20 as part of the payment.
The Bharti Airtel stock closed higher on Friday on the BSE at Rs 565.10 a share, up by Rs 25.30, or 4.69 per cent than its previous close.