Vodafone Idea share price jumped 10% in early trade on Monday after the company received significant relief on its adjusted gross revenue (AGR) dues. Vodafone Idea shares gained as much as 9.98% to ₹11.24 apiece on the BSE.
The government has reduced Vodafone Idea’s AGR liability by approximately 27%, or ₹23,649 crore, bringing the total dues down to ₹64,046 crore after reassessment. In addition, the company has also been granted a five-year moratorium on these payments, providing near-term cash flow relief.
The Department of Telecommunications (DoT) had earlier constituted a committee to reassess the AGR dues, which were initially pegged at ₹87,695 crore as of December 31, 2025. The revised figure was subject to final evaluation and approval by the committee.
“…we now wish to submit that the DoT vide its communication dated 30 April 2026 has informed that the Committee formed for the purpose has finalized the AGR dues at ₹64,046 crore as on 31 December 2025,” Vodafone Idea said in a regulatory filing on April 30.
Structured repayment plan
The company has to clear the dues in two phases over a 10-year period. The first payment will commence after a five-year moratorium. Vodafone Idea is required to pay a minimum of ₹100 crore annually for four years from FY32 to FY35. The remaining balance will be settled in six equal annual instalments from FY36 to FY41.
Financial Outlook
According to Citi, the absence of interest accrual and the extended repayment schedule — under which nearly 99% of dues are payable between FY36 and FY41 — significantly improve the liability profile. The effective AGR burden is estimated to decline from around ₹35,000 crore to ₹26,000 crore on a net present value (NPV) basis.
With regulatory uncertainty largely resolved, Citi believes Vodafone Idea is now better positioned to secure its pending ₹25,000 crore bank debt funding. This, in turn, could enable the company to proceed with its ₹45,000 crore three-year capital expenditure plan outlined in its January 2026 strategy update.
Outlook and valuation impact
Citi noted that further clarity is awaited on the accounting treatment of the revised AGR dues, particularly given the absence of interest accrual. Factoring in the NPV savings, the brokerage estimates that Vodafone Idea’s net debt-to-EBITDA ratio could decline from approximately 20x as of December 2025 to around 14%, assuming other factors remain constant.
The brokerage has also adjusted its forecasts to reflect a delayed tariff hike, now expected in Q3 FY27 instead of Q1 FY27. Additionally, it has marginally reduced its target EV/EBITDA multiple to 12x, maintaining a discount to peers.
Citi has revised its FY27–FY28 EBITDA estimates downward by 6–7%. The brokerage firm has maintained a ‘Buy’ call and Vodafone Idea share price target of ₹14 apiece.
The successful closure of Vodafone Idea’s debt funding is also expected to have positive spillover effects for Indus Towers, Citi added.
Vodafone Idea Share Price Performance
Vodafone Idea share price has gained 26% in one month, but the stock has fallen 5% in three months. The telecom stock has gained 15% in six months and has rallied over 53% in one year.
At 9:17 AM, Vodafone Idea share price was trading 10% higher at ₹11.24 apiece on the BSE.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
