Beleaguered Indian wireless carrier Vodafone Idea will pay ₹3,500 crore ($490 million) in telecom dues to the federal government by the end of this week, the company said on Monday.

Hopes that Vodafone Idea could outlive the financial squeeze due to the outstanding dues payments helped its shares gain as much as 23.5%, their best intraday gain since Jan. 21, after dropping more than 24% on Friday. The stock ended flat on Monday.

"While there is a concern that Vodafone is against the wall, there is a slim hope that they will get through," said Siddhartha Khemka, head of research at Motilal Oswal Financial Services in Mumbai.

Care Ratings downgraded the telco's long term facilities and NCDs to 'CARE BB-' from 'CARE BBB-'.

Vodafone Idea said the downgrade is due to financial impact of no relief in payment of govt dues.

Earlier on Monday, a lawyer for the company said Vodafone Idea would pay ₹3,500 crore in dues to the government by Feb. 21. The lawyer declined to be named as the matter is still in court.

The Indian government last week ordered mobile carriers to immediately pay billions of dollars in dues after the country's top court threatened the companies and officials with contempt proceedings for failing to implement an earlier ruling.