Vodafone Idea share price jumps over 9% after Supreme Court allows Centre to reconsider AGR dues issue

Vodafone Idea share price jumped over 9% on Monday after the Supreme Court allowed the Central government to reconsider the issue of reassessment of the telecom operator’s adjusted gross revenue (AGR) dues. Vodafone Idea shares rallied as much as 9.45% to ₹10.53 apiece on the BSE after the SC ruling.

The Supreme Court observed that the issue falls within the policy domain of the Union government, noting that it sees no impediment to the Centre reconsidering the matter and taking an appropriate decision.

‘Supreme’ Relief

In a major relief to the financially distressed telecom company, the Supreme Court stated that there was no reason to prevent the Centre from re-examining the issue. On Monday, the court allowed the government to address the telecom operator’s grievances without judicial intervention and to reassess the demand for AGR dues.

The hearing was deferred after Solicitor General Tushar Mehta, representing the Union government, sought additional time. Chief Justice of India B.R. Gavai directed Mehta to present a clear position on the matter and postponed the hearing for the fourth time.

A bench comprising Chief Justice B.R. Gavai and Justice K. Vinod Chandran observed that any decision regarding relief for the telecom operator would fall under the government’s policy discretion.

AGR Case Timeline

On October 13, the Supreme Court had deferred the hearing of Vodafone Idea’s plea in the AGR dues case to October 27. The debt-laden telecom firm has challenged the DoT’s demand, seeking to quash additional AGR dues of ₹5,606 crore claimed for the period up to FY2016–17.

AGR is the income figure used to calculate the licence fees and spectrum charges that telecom companies must pay to the government.

The top had earlier adjourned the hearing on the petition on several occasions at the request of the telecom firm and Solicitor General Tushar Mehta, appearing for the Centre.

The central government had earlier said that efforts were underway to arrive at a resolution with the company. Mehta said the government held nearly 50% equity in Vodafone Idea, making it a direct stakeholder in the operator’s survival.

Vodafone Idea has sought a direction to the DoT to “comprehensively re-assess and reconcile all AGR dues for the period up to FY 2016-17 following the ‘Deduction Verification Guidelines’”dated February 3, 2020.

Earlier this year, the apex court refused to review its 2021 order, rejecting telecom companies’ pleas for rectification of alleged errors in the calculation of AGR dues payable by them.

In September 2020, the apex court had set a 10-year timeline for telecom service providers to clear their AGR-related dues amounting to ₹93,520 crore. It directed the operators to pay 10% of the total dues, as assessed by the DoT, by March 31, 2021, with the remaining balance to be paid in annual installments from April 1, 2021, to March 31, 2031.

The Supreme Court had earlier delivered its landmark verdict on the AGR issue in October 2019. Subsequently, the DoT filed a plea seeking permission for staggered repayment of the dues over 20 years.

Previously, the definition of AGR included both telecom and non-telecom income — such as interest earned from deposits or proceeds from asset sales. However, in 2021, the government revised the rules to exclude non-telecom income from AGR calculations, easing the financial burden on telecom operators.

At 11:45AM, Vodafone Idea share price was trading 8.42% higher at ₹10.43 apiece on the BSE.

(With inputs from PTI)

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