Posted on February 19, 2025, by Niftynews
Shares of Vodafone Idea saw a significant rise of over 4% on February 19, 2025, after the telecom giant strongly denied a ₹73 crore Goods and Services Tax (GST) payment demand that had been levied on the company. The stock uptick came during the intraday trade as the company responded to the GST payment demand from the Kolkata GST office.
GST Payment Demand and Penalty
On February 4, 2025, Vodafone India received a formal notice under Section 74 of the Central Goods and Services Tax Act, 2017, involving an alleged non-payment of GST. This included a penalty of ₹16.96 crore along with applicable interest. The company did not accept the order, and in an official statement, it conveyed that it would take appropriate actions to challenge the GST payment demand.
Vodafone Idea stated that it does not agree with the claims made by the tax authorities and intends to pursue suitable measures to rectify or reverse the decision. The company emphasized that its maximum exposure was limited to the tax demand, along with interest and penalty.
“The Company does not agree with the Order and will take appropriate action(s) for rectification/ reversal of the same,” read the filing on the stock exchange.
Stock Movement in Response to the GST Payment Dispute
The market reacted positively to the company’s stance on the GST payment dispute, with Vodafone Idea share price gaining by 4% in the early hours of February 19, 2025. At 2:40 PM, the company’s shares were up by 1.98%, trading at ₹8.23 per share on the NSE.
This surge in the share price demonstrates investor confidence in the company’s financial stability and its ability to manage regulatory challenges effectively.
Vodafone Idea’s Financial Performance in Q3 FY25
Despite the GST payment dispute, Vodafone Idea has shown considerable improvement in its financial performance. In the third quarter of FY2024-25 (Q3 FY25), the company reported a reduced net loss of ₹6,609.3 crore, compared to a net loss of ₹6,985.9 crore in the same period the previous year. This reduction in losses was driven by an increase in revenue from operations, which stood at ₹11,117.3 crore for the quarter, up by 4.16% YoY from ₹10,673.1 crore in Q3 FY24.
The company’s highest-ever quarterly cash EBITDA reached ₹24.5 billion, marking a YoY growth of approximately 15%. This performance is attributed to the company’s ongoing investments in its infrastructure and the rollout of 5G services, targeting key geographic areas.
Vodafone Idea CEO, Akshaya Moondra, emphasized the company’s focus on increasing investments and accelerating the pace of capital expenditure (capex) deployment in the coming quarters. The company has also secured ₹19.1 billion in fresh equity infusion from one of its promoters, bringing the total equity capital raised over the last 10 months to approximately ₹260 billion.
5G Rollout and Future Plans
As part of its future growth strategy, Vodafone Idea is working on the phased rollout of 5G services and plans to expand its network capabilities significantly. The company is aiming for a total network expansion investment of ₹500–550 billion over the next three years.
Moondra also highlighted the company’s ongoing engagement with lenders for debt financing and expressed confidence that the government’s decision on bank guarantee waivers would provide critical support to the telecom sector, which plays a pivotal role in Digital India’s future development.
Conclusion: Investor Confidence in Vodafone Idea
The 4% rise in Vodafone Idea share price reflects the market’s positive reception of the company’s stance on the GST payment dispute and its overall financial performance. Despite facing regulatory challenges, the company’s solid results and investment plans, particularly in the 5G space, position it for future growth.
Investors continue to watch Vodafone Idea closely, given its ongoing recovery and strategic investments aimed at improving its market position in India’s competitive telecom landscape.
