Even as Vodafone Idea has received a breather on most of its adjusted gross revenue dues, a near-term obligation remains.
The telecom operator will need to pay ₹700–800 crore in AGR dues related to FY18 and FY19 over six years, including the current financial year, according to two officials familiar with the matter.
This amount is outside the ₹87,695 crore in AGR dues as of 31 December 2025, which the government has frozen, and Vodafone Idea will pay it between FY32 and FY41.
The reassessment process to arrive at Vodafone Idea’s final AGR liability is expected to take four to five months, one of the officials said.
“In the Supreme Court’s 1 September 2020 order, the table of AGR calculations also included figures for FY18 and FY19. However, the Court crystallised the AGR dues only up to FY17,” the second official said. “As a result, Vodafone Idea will still need to pay the dues for FY18 and FY19. The amount is small compared to the substantial relief it will have from the timeline extension to pay its huge AGR dues.”
AGR is the revenue base used to calculate licence fees and spectrum usage charges payable to the government.
Over the next few months, the department of telecommunications (DoT) will undertake a detailed reassessment of the ₹87,695 crore AGR dues of the company.
The exercise will involve reassessment at each local circle level, going through the history of the subsidiaries linked to Vodafone Idea before the merger and the licences it had secured, the second official said, adding that the final amount is expected to reduce.
The DoT will also seek detailed, circle- and year-wise information from Vodafone Idea to address discrepancies in the dues. A government committee will decide the final outcome of the AGR reassessment exercise and that will be binding on both the government and the company.
Officials said the department is expected to send formal communication to Vodafone Idea on the cabinet decision with regard to the moratorium and other details over the next few days.
Any delay in finalizing the liability could complicate the company’s ability to raise external funding for much-needed investments. Debt would carry interest obligations while equity infusion requires clear visibility on outstanding liabilities, especially with annual spectrum instalments set to rise sharply from FY27 onwards, said Parag Kar, an independent telecom analyst.
On Wednesday, news of the cabinet’s move of giving moratorium to the company on AGR dues shook investor confidence. Vodafone Idea’s stock plungied 11.5% on the National Stock Exchange to ₹10.67, with no clarity forthcoming on either the overall AGR dues or any relief on interest and penalties pertaining to the dues. The shares of the company recovered on Thursday, and closed 8.1% higher at ₹11.6 on the National Stock Exchange.
In a note dated 1 January, brokerage house Emkay Global maintained a ‘sell’ rating on the stock with a target price of ₹6.
“Contrary to the street's expectations of at least a 50% waiver, no waiver on the pending dues linked to AGR was provided by the cabinet,” the brokerage house said in the note.
“While the relief package addresses AGR dues, Vi (Vodafone Idea) also has ₹1.2 trillion of deferred payment obligations toward spectrum, with significant scheduled payments between FY26 and FY44. The current Ebitda is insufficient to meet the capital expenditure (capex) or spectrum debt repayment requirements. The company will need additional relief/funding to alleviate such challenges,” Emkay Global added.
Queries emailed to DoT and Vodafone Idea did not elicit any response till press time.
AGR case
To be sure, in 2020, the government, with cabinet approval, proposed before the Supreme Court that telecom operators be allowed to clear their AGR dues over a 20-year period.
The proposal envisaged crystallisation of AGR liabilities up to a specified cut-off date, with payments to be made in annual instalments while preserving the net present value of government revenue through the levy of interest.
The Supreme Court found the 20‑year period excessive and fixed a 10‑year instalment schedule (FY22 to FY31) for AGR payments.
Notably, DoT will also have to inform the Supreme Court on the relief measures it will be giving to Vodafone Idea after the reassessment exercise gets completed.
“The plan to freeze the AGR dues is actually drawn from the earlier proposal. We see the timeline extension without any interest as a bigger relief. It would now give clarity to the banks and investors for providing the required funds to the company,” the second official said.
The recent operational crisis at IndiGo also prompted the government to act fast on the relief to ensure competition in the sector, the official added.