Shares of Vodafone’s India Arm in Freefall

• Second day of sharp losses sparked by leak of letter signalling Birla sale plan
• Two-day decline has wiped $730m of value from Vodafone Idea

Shares in telecoms giant Vodafone’s debt-ridden Indian unit fell sharply for a second day on Wednesday following reports that its billionaire chairman thought the firm was on the brink of collapse and wanted to sell his stake.

Vodafone Idea and other operators have been squeezed hard since Jio, owned by Asia’s richest man Mukesh Ambani, entered the market in 2016 with dirt-cheap internet and free calls.

In a June 7 letter to a cabinet secretary that emerged in news reports this week, Vi’s Kumar Mangalam Birla offered to “hand over” his 27.66% stake to the government, saying the firm was at an “irretrievable point of collapse”.

The firm’s shares tanked more than 10% on Tuesday, the day after details of the letter emerged, and fell a further 18.5% on Wednesday.

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While it pared Wednesday’s drop, the sell-off has wiped about 54 billion rupees ($730 million) off its market capitalisation.

Total debt stood at 1.86 trillion rupees at the end of March and it has been struggling to raise funds from investors.

Vodafone Group CEO Nick Read last month ruled out the prospect of providing extra support.

“We, as a group, try to provide them as much practical support as we can,” Read told an analyst call. “But I want to make it very clear, we are not putting any additional equity into India.”

Vi is a joint venture between Indian conglomerate Aditya Birla and Vodafone, which holds a 44.39% stake.

With a market share of 24% in March, Vi now lags behind competitors Bharti Airtel and Reliance Jio in the competitive Indian market of 1.3 billion people.

Last month, the firm reported a net loss of 69.85 billion rupees for the quarter through March.