Shares in the debt-laden Vodafone Idea Ltd surged by around 10% on Monday, following reports that the Supreme Court had confirmed the government is permitted to consider relief on the entirety of the telecom firm’s Adjusted Gross Revenue (AGR) dues.
The moratorium on Vodafone Idea’s spectrum and AGR payments concluded in September. Telecom operators, including Vodafone Idea, have consistently contested the government’s method of calculating AGR.
The beleaguered telecoms firm had reportedly sought relief on both the supplementary AGR dues (valued at approximately ₹9,500 crore) and its total AGR dues of close to ₹80,000 crore, according to CNBC-TV18.
Adjusted Gross Revenue is the income figure used to calculate the licence fees and spectrum charges that telecom companies are required to pay the government.
The positive news also had a knock-on effect on associated companies. Shares of telecom tower operator Indus Towers, which is owed money by Vodafone Idea, rose by as much as 5.8% to ₹384.55.
The telco’s stock on Monday closed at ₹9.54 per share, 9.28% higher on the NSE.
On 27 October, the Supreme Court ruled the government was free to reconsider Vodafone Idea’s AGR dues, which had initially sparked uncertainty over whether this observation applied solely to the firm’s supplementary AGR dues or the total amount owed.
The telecom operator had argued these supplementary claims were unsustainable, given that the liabilities had already been crystallised by the apex court’s 2019 ruling on AGR dues.
Government holds 49% equity stake in Vodafone
During last week’s hearing, Solicitor General Tushar Mehta, appearing for the Centre, informed the top court that the government now holds a 49% equity stake in Vodafone Idea and that approximately 20 crore consumers are reliant on its services.
He submitted that, considering these factors, the Centre was prepared to examine the issues raised by the company to ensure consumer interests are safeguarded.
“The solicitor general on instructions states that taking into consideration the change in circumstances, i.e., the Centre acquiring 49% equity and 20 crore customers utilising the service of the petitioner, the Union (government) is willing to examine the issues raised by the petitioner (company),” the SC had said.
“Taking into consideration the status of the case now – the government has infused substantial equity into the company and that it will have a direct bearing on 20 crore customers — we see no issue in the Union reconsidering the issue and taking appropriate steps,” the CJI had said in the order.
In a separate development, The Economic Times reported that US private equity firm Tillman Global Holdings (TGH) is in negotiations to invest $4 billion to $6 billion in Vodafone Idea and potentially take operational control.
