Vodafone Idea’s Make-or-Break Moment: ₹30,000 Crore at Stake in Supreme Court

Image Source: The Economic Times

Vodafone Idea has submitted a new petition with the Supreme Court, seeking an urgent waiver of more than ₹30,000 crore in penalty and interest towards its long-pending adjusted gross revenue (AGR) dues. The telecom company is seeking an early hearing on May 19, contending that the Centre-now a 49% shareholder after converting dues into equity-must not be allowed to grant relief on its own since the Supreme Court's original AGR verdict has limitations on it.

Key Highlights:

Enormous Relief Sought: Vodafone Idea's appeal seeks the Supreme Court to grant relief from over ₹30,000 crore in AGR-related dues and interest, highlighting the grave financial pressure on the company and the entire telecom industry.
Government Holding Complicates Relief: The firm argues that, with the government now effectively owning a near-majority of the company, the Centre is "handicapped" to provide further relief without court intervention. The appeal highlights that the industry will be on the brink of collapse in the absence of further support, affecting millions of subscribers and industry health.
Investor Response: The news caused Vodafone Idea shares to rise by as much as 4%, reaching the day's high, as investors received the firm's preemptive legal action and the possibility of a significant reduction in liabilities positively.
Sector-Wide Implications: The AGR problem, which has plagued Indian telecoms for decades, continues to be a daunting challenge. Vodafone Idea's action comes as Bharti Airtel too ventures into legal recourse for a similar reprieve, and follows the government's higher equity holding after last year's telecom relief package.
5G Rollout Continues: In the midst of these financial and legal wars, Vodafone Idea rolled out its 5G services in Delhi, a major milestone in its network growth and a signal that it plans to continue being a major player in the industry.

The Supreme Court's reaction to Vodafone Idea's appeal could be a precedent for the industry's future, with billions at stake and the stability of India's telecom sector in the balance.

Source: Moneycontrol, CNBC-TV18, Business Today