Vodafone Idea`s share price nearly doubled during the past week in expectation of a government relief package for the struggling telecom sector. Some relief did arrive but not enough to prevent a rating downgrade, which is set to hurt its stock`s stellar show.

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Despite a relief by the government in the form of a two-year moratorium on spectrum-related dues which is tantamount to Rs 42,000 crore financial support to the stressed sector, Crisil on Friday (after market hours), downgraded Vodafone Idea`s rating on Non-Convertible Debentures of Rs 3,500 crore.

Vodafone Idea`s share price had almost doubled and closed at Rs 6.55 apiece on Friday.

However, Bharti Airtel, Vodafone Idea Ltd and Tata Teleservices on Friday individually filed review petitions in Supreme Court on the recent AGR verdict seeking waivers on penalties and interest. Earlier the court ordered them to pay around Rs 92,000 crore to the Centre in the ADR case.

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Fitch Rating also said that the decision by all three private Indian telecommunication companies to raise tariffs from December 2019 and a two-year moratorium on payment of spectrum dues are positive for the industry but these "are unlikely to be sufficient to offset the impact of a recent Supreme Court judgement for incumbents Bharti Airtel and Vodafone Idea Ltd".

The rating agency further said that its outlook on the telecom sector was negative for 2020 primarily due to heightened financial risk associated with the large unpaid AGR-related dues.

"On 20 November 2019, the government announced plans to suspend payment of deferred spectrum dues for two years, which will ease cash flow pressure on all three telcos," Fitch added.