Vodafone Idea Shares Ring Down 2% as Supreme Court Delays AGR Verdict

Image Source: The Economic Times

Vodafone Idea’s stock declined by 2% on October 13 following the Supreme Court’s postponement of its Adjusted Gross Revenue (AGR) plea hearing to October 27. The telco is contesting a fresh ₹5,606 crore DoT demand relating to the 2016-17 financial year amidst ongoing discussions of a resolution.

Shares of Vodafone Idea Limited (VIL) fell 2% to ₹8.87 on October 13 after the Supreme Court deferred the hearing on the telecom company’s petition against fresh Adjusted Gross Revenue (AGR) dues to October 27. This marks another delay in a prolonged legal tussle between VIL and the Department of Telecommunications (DoT) regarding AGR liabilities.

VIL had filed a fresh plea against a DoT demand of ₹5,606 crore related to the FY 2016-17, adding to a broader dispute over cumulative AGR dues since 2017. The telco’s plea argues that this fresh demand contradicts earlier Supreme Court rulings that capped AGR liabilities till FY 2016-17. Vodafone Idea contends that the DoT’s approach involves inconsistencies and calls for reassessment in line with the 2020 Deduction Verification Guidelines.

Financially stressed but backed by the Centre, which holds nearly 49% equity post debt-equity conversions, Vodafone Idea has struggled under heavy debt and regulatory liabilities. The government has indicated ongoing efforts to find a viable resolution to the AGR impasse to stabilize the telco and the sector.

Key Highlights:

Vodafone Idea shares dropped 2% on the Supreme Court’s hearing deferral to October 27.
The fresh AGR demand of ₹5,606 crore relates to FY 2016-17, part of a larger dispute exceeding ₹9,000 crore.
VIL disputes the DoT’s fresh claims, arguing they violate earlier SC decisions.
The Centre is exploring options, including possible one-time settlements to waive interest and penalties.
The telco’s financial health hinges critically on the Supreme Court’s decision and regulatory clarity.
Market sentiment remains cautious amid the ongoing uncertainty affecting Vodafone Idea’s stock performance.

The deferment extends the high-stakes legal uncertainty VIL faces, intensifying investor focus on the telecom sector’s regulatory framework and financial stability.

Sources: Moneycontrol, Economic Times, Economic Times Now, CNBC TV18, NewsBytes

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Vodafone Idea Shares Ring Down 2% as Supreme Court Delays AGR Verdict

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