Post by : Bianca
Haleem
Vodafone Idea shares climbed almost 10% in intraday trade on Tuesday after the Supreme Court gave the Central government permission to reconsider the reassessment of the telecom operator’s adjusted gross revenue (AGR) liabilities, a long-standing financial burden for the company.
The court said the AGR matter falls within the policy remit of the Centre and indicated there was “no impediment” to the Union government taking an appropriate decision, a statement that quickly improved investor sentiment around the debt-heavy operator.
The development provides some breathing room for Vodafone Idea, which has been under strain from heavy liabilities and intense competition. Any reassessment or relief on AGR dues could reduce financial pressure and improve the company’s prospects.
At present, the government holds around 50% stake in Vodafone Idea, making it a direct stakeholder in any recovery effort. A cut or adjustment in AGR demands would bolster the operator’s balance sheet and could free resources for network investments and tariff competitiveness — key to closing the gap with stronger rivals Reliance Jio and Bharti Airtel.
The AGR dispute dates back almost two decades and centers on how telecom revenue should be calculated for licence fees and spectrum charges. In 2019, the Supreme Court ruled operators must pay based on total revenue, including non-core income, prompting substantial claims from the Department of Telecommunications (DoT). Vodafone Idea has contested the DoT’s additional demand of ₹5,606 crore for the period up to FY2016–17, saying the figure was wrongly computed.
Previous requests for reassessment had been delayed with multiple adjournments. Tuesday’s observation by the court, however, opens a path for the government to review the matter — a move investors interpret as a potential turning point for the embattled operator.
The intraday rally reflected renewed investor belief that a long-awaited resolution to the AGR dispute may be achievable, offering hope for Vodafone Idea’s financial stabilisation.
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