Financial Distress of Telecom Sector in India- a Study of Reliance Communication and Vodafone Idea

Abstract

This study focused mainly to understand in retrospect the development of financial distress of two companies and has not delved into the details of economic factors. This opens up scope for further research to identify the impact of exact factors that may have contributed towards the distress of the respective to the companies under study. This study focused for the periods 2018-2022 and considered two companies namely, Vodafone Idea and Reliance Communication. The lack of revenue generation, AGR dues, high debts, inability to clear debts, insufficiency of cash and losing of market share have all contributed to the same. The applied distress models have all predicted the that said companies are in a state of distress. Also, between the models not much variation can be seen in terms of the final prediction.