Vodafone Idea’s Share Price Plummets As Supreme Court Defers AGR Hearing

Shares of debt-ridden telecom operator Vodafone Idea fell as much as 9% on Friday after the Supreme Court deferred its Adjusted Gross Revenue (AGR) dues hearing to October 6.

Earlier, the apex court had postponed its September 19 hearing to September 26.

Solicitor General Tushar Mehta, representing the Department of Telecommunications (DoT), requested more time to reply to the telecom operator’s plea, a request that Vodafone Idea did not contest, according to reports.

AGR Dues Dispute

The dispute traces back to the Supreme Court’s March 2020 ruling, which finalized Vodafone Idea’s AGR dues up to FY17 as per the Department of Telecommunications’ (DoT) calculations and barred any reassessment.

However, the DoT has since raised fresh demands for FY18 and FY19, which Vodafone Idea challenged in its petition dated Sept. 8, arguing that these claims cover periods already settled by the Court.

According to the company, the revised calculation exceeds the scope of the 2020 judgment. Of the new demand, about ₹5,675 crore pertains to the pre-merger Vodafone Group, while ₹2,774 crore relates to the merged entity.

Vodafone Idea claims duplication in DoT’s assessment and said nearly ₹5,606 crore has already been settled under the earlier ruling.

Mounting Debt

The government currently holds a 50% stake in Vodafone Idea, after converting ₹53,083 crore of AGR dues into equity across 2023 and 2025.

Despite this, the operator faces heavy financial pressure, with AGR dues of around ₹83,400 crore payable in annual installments of ₹18,000 crore starting March 2026. Its overall government liabilities, including penalties and interest, are estimated at nearly ₹2 trillion.

The beleaguered firm has cautioned that the additional demand could worsen its financial strain at a time when it is seeking to raise funds, expand 4G services, and accelerate its 5G rollout, impacting both its 18,000 employees and 198 million subscribers.

Investor Caution Advised

Vodafone Idea’s future hinges on critical external factors. A favorable Supreme Court ruling or relief on AGR dues could provide immediate judicial respite, while a significant equity infusion from private investors or a strategic partner is essential to strengthen its balance sheet, according to SEBI-registered investment advisor Wealth Wishers.

Government support, whether through relief measures or a potential merger with MTNL/BSNL, remains another possibility. The company has already cautioned that insolvency proceedings may become unavoidable by 2026 if no relief or funding is secured after the moratorium ends, they said.

In the short term, prospects remain highly uncertain, dependent on legal decisions and fundraising. In the medium term, the company faces continued erosion of its market share unless fresh capital is secured. In the long term, insolvency risks loom unless structural relief is secured, although policymakers may prefer to retain three strong telecom operators, Wealth Wishers added.

For investors, a cautious wait-and-watch approach is prudent, booking partial profits when possible and prioritizing capital preservation, they said.

Stock Watch

Retail sentiment for Vodafone Idea on Stocktwits turned ‘bearish’. It was ‘neutral’ a session earlier and ‘bullish’ a week back. It was the top trending stock on the platform.

The stock has gained 3% year-to-date.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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