Vodafone Idea share price jumps 10% as Supreme Court clarifies on AGR dues case, reports of likely TGH’s $6 bn infusion

Vodafone Idea share price jumped as much as 10% on Monday after the Supreme Court issued a key clarification regarding the company’s adjusted gross revenue (AGR) dues. Vodafone Idea shares were locked at 10% upper circuit of ₹9.60 apiece on the BSE.

The Supreme Court said that Vodafone Idea had asked for relief on both - additional AGR dues and a reassessment of all pending dues, a report said.

The apex court clarified that the government is free to consider granting relief to Vodafone Idea on both counts — the additional AGR dues as well as a reassessment of all pending dues.

During its earlier hearing on October 27, there was uncertainty over whether the Supreme Court’s observation applied only to Vodafone Idea’s plea concerning additional AGR dues of around ₹9,500 crore or extended to the entire outstanding dues of nearly ₹80,000 crore.

The court noted that, given the Centre’s significant stake in the debt-laden telecom company and the potential impact on over 20 crore consumers, it sees no impediment to the government reconsidering the issue and taking an appropriate decision, the report said.

The clarification is seen as a positive development for Vodafone Idea, which has been struggling under a heavy debt burden and urgently requires relief and fresh capital infusion to remain operationally viable.

Tillman Global Holdings Capital Infusion

Earlier a report said that private equity firm Tillman Global Holdings (TGH) is in advanced discussions to invest $4–6 billion in the debt-laden telecom operator.

According to a report by The Economic Times, Tillman Global Holdings (TGH) is negotiating a potential investment of $4-6 billion, or around ₹35,000 - ₹52,800 crore, in Vodafone Idea and may seek operational control of the company as a part of the deal.

The report added that the New York-based investment firm is not seeking a waiver of all Vodafone Idea’s dues, but is proposing a restructuring of the liabilities to provide the beleaguered telco some financial relief. A detailed proposal has reportedly been submitted to the government.

The investment is contingent upon the government offering a comprehensive package covering all of Vodafone Idea’s liabilities, including those related to adjusted gross revenue (AGR) and spectrum payments, the report said, quoting people familiar with the matter.

If the deal materialises, TGH will take the promoter status and take control from existing promoters Aditya Birla Group and UK’s Vodafone. The Indian government currently holds a 48.99% stake in Vodafone Idea after converting past dues into equity. It would remain a passive minority shareholder. The Aditya Birla Group and Vodafone Plc hold 9.50% and 16.07%, respectively.

The deal is likely to move forward once the government finalises a relief package for the telecom operator, the report said.

Vodafone Idea requires a capital infusion before the end of the fiscal year, when it is scheduled to begin repaying a large portion of its statutory AGR dues. Although the Supreme Court recently provided some relief to the company, uncertainty remains over whether the order applies to all AGR liabilities or only to the additional demand of about ₹9,000 crore.

Vodafone Idea Share Price Performance

Vodafone Idea share price has jumped over 33% in three months and gained 25% in six months. On a year-to-date (YTD) basis, Vodafone Idea shares have gained 10%, while it has risen 5% in one year. However, the telecom stock has fallen 36% in two years.

At 2:30 PM, Vodafone Idea share price was locked at 10% upper circuit of ₹9.60 apiece on the BSE.

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