Vodafone-Idea shares
Shares of Vodafone Idea witnessed a surge on Monday after the Supreme Court allowed the Central Government to reconsider the issue of revaluation of the telecom operator’s Adjusted Gross Revenue (AGR) dues. Amidst the market rally, after the Supreme Court’s decision, Vodafone Idea shares rose 9.45% to Rs 10.53 per share on BSE.
A boom is being seen in the Indian stock market today in the first trading day of the week. The market’s main index Sensex even crossed 700 points during trading today. At 1 pm, the Sensex is trading at 84,813.32 with a gain of about 601.44 points. At the same time, Nifty 50 is also beyond 26 thousand.
AGR case timeline
On October 13, the Supreme Court had postponed the hearing of Vodafone Idea’s petition in the AGR dues case till October 27. The debt-laden telecom company has challenged the DoT’s demand for cancellation of additional AGR dues of Rs 5,606 crore claimed for the period up to FY 2016-17. AGR is the revenue figure used to calculate the license fee and spectrum charges that telecom companies have to pay to the government. Earlier, the top court had adjourned the hearing on the petition several times on the request of Solicitor General Tushar Mehta, appearing for the telecom company and the Centre. The central government had earlier said that efforts are on to find a solution with the company. Mehta said the government holds about 50% stake in Vodafone Idea, making it a direct stakeholder in the operator’s existence.
Vodafone Idea has sought direction to the DoT to comprehensively reassess and resolve all AGR dues for the period up to FY 2016-17 following the ‘Deduction Verification Guidelines’ dated February 3, 2020. Earlier this year, the top court had refused to review its 2021 order dismissing a plea by telecom companies to rectify alleged errors in calculating the AGR dues payable by them. In September 2020, the top court had set a 10-year deadline for telecom service providers to clear AGR-related dues of ₹93,520 crore. It had directed operators to repay 10% of the total dues as determined by the Department of Telecommunications by March 31, 2021, while the remaining amount was to be paid in annual installments from April 1, 2021, to March 31, 2031.
Supreme Court on AGR
The Supreme Court had earlier given its historic verdict on the AGR issue in October 2019. Subsequently, the Department of Telecommunications had filed a petition seeking permission to pay the dues in 20 years. Earlier, the definition of AGR included both telecom and non-telecom income—such as interest earned on deposits or income from sale of property. However, in 2021, the government amended the rules to exclude non-telecom income from AGR calculations, thereby reducing the financial burden on telecom operators.