Shares of Vodafone Idea Limited (VIL) tanked over 6 per cent on Friday after a sharp rally a day ago. At 2:15 pm, the stressed telecom firm’s shares fell 6.50 per cent on the Bombay Stock Exchange (BSE) and nearly 7 per cent on the National Stock Exchange (NSE).

The telecom company’s stock tanked even after the company issued a clarification that it has paid its licence fee dues for the quarter ended June. While Vodafone Idea shares gained nearly 12 per cent yesterday, the rebound came after seven straight sessions of losses.

The telecom firm’s stock has been under pressure due to its deteriorating financial condition. It may be noted that Vodafone Idea stock has tumbled nearly 50 per cent from the beginning of this year due to continued quarterly losses and its inability to raise funds for clearing dues.

Read | Why Vodafone-Idea’s financial health has spooked investors

As the situation stands, Vodafone Idea faces the risk of bankruptcy as it has pending dues worth Rs 1.9 lakh crore including adjusted gross revenues (AGR), licence fees and bank dues.

The company has been witnessing losses on the share market as a report recently suggested that Vodafone Idea may not survive even if the government comes out with a relief package. The government has asked the ailing telco’s promoters to infuse capital in order to revive the business.

Analysts are not optimistic about Vodafone Idea and believe that the company’s liabilities are much higher than operating profit and revenues. While government support is necessary to pull the firm out of a financial crisis, there may be a need for promoters to infuse additional capital.

However, the promoters are not keen on any such capital infusion as the company has not made any profit after the merger of Vodafone and Idea Cellular in 2018.

Many analysts tracking the telecom sector believe that Vodafone Idea will not be able to meet upcoming payout commitments as it faces a steep financial crisis.

In view of the situation, analysts are not too keen on the revival of the Vodafone Idea stock, unless the government intervenes to save the company.