Vodafone Idea shares fall 2% after Supreme Court postpones AGR plea hearing

Shares of Vodafone Idea Ltd (VIL) fell 2% on Monday after the Supreme Court postponed the telecom giant’s hearing against the government’s additional adjusted gross revenue (AGR) demand to October 27, adding to uncertainty over the company’s long-standing financial liability.

VIL had filed a fresh petition challenging the Department of Telecommunications’ (DoT) demand of Rs 5,606 crore for the financial year 2016-2017, seeking a direction to the DoT to “completely reassess and reconcile” all AGR dues for the period up to financial year 2016-2017, in accordance with the February 3 deduction verification guidelines 2020.

The Supreme Court’s postponement follows previous setbacks for Vodafone Idea and other telecom giants. Earlier this year, the apex court had dismissed petitions by VIL and Bharti Airtel seeking rectification of alleged errors in the order for calculating AGR dues 2021.

Government signals possible settlement

Despite the legal roadblocks, the Center has indicated that efforts are being made to find a solution. Last month, the government told the apex court that “a resolution may be required” to Vodafone Idea’s petition. Bloomberg reported on October 6, citing sources, that India is considering a one-time settlement of its long-standing AGR dues from Vodafone Group Plc’s local venture, possibly through a waiver of interest and penalties, followed by principal concessions. Officials are reportedly in the process of drafting the framework as they evaluate measures to avoid legal challenges from other telecom operators with AGR obligations, the Bloomberg report said. The total dispute amounts to almost Rs 2 lakh crore.

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The postponed hearing adds to the uncertainty surrounding Vodafone Idea’s balance sheet and investor sentiment. As the Supreme Court sets the next date for October 27, investors will be watching closely for signs of a concrete resolution that could reshape Vodafone Idea’s financial prospects.

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