Struggling under AGR dues of nearly ₹83,400 crore, its survival hinges on hopes of a fresh relief. Analysts warn the company’s collapse could reduce India’s telecom sector to just two players.
Shares of beleaguered telecom operator Vodafone Idea rose as much as 4.5% on Friday on reports that the Department of Telecommunications (DoT) has submitted a proposal to the Prime Minister’s Office (PMO) seeking fresh relief measures for the company.
The note, sent last month, outlines several options, including a two-year extension on statutory payments currently under moratorium, according to a report by Mint. A final decision will rest with the PMO.
No Respite from Debt Challenges
Vodafone Idea is under intense financial stress, with outstanding adjusted gross revenue (AGR) dues of about ₹83,400 crore. Annual repayments of nearly ₹18,000 crore are due from March 2025, while total dues to the government, including penalties and interest, amount to almost ₹2 trillion.
The debt-laden telco, which employs over 18,000 people and serves close to 198 million subscribers, has consistently warned of its inability to survive without fresh support. Analysts caution that a collapse could reduce India’s telecom market to just two dominant players – Reliance Jio and Bharti Airtel.
Among the relief measures under consideration are smaller annual payouts and possible waivers on penalties and interest.
Earlier this year, former CEO Akshaya Moondra had urged the DoT to settle Vodafone Idea’s dues at ₹17,213 crore as principal, while seeking a complete waiver on penalties and interest. He also stressed that unless the moratorium is extended until FY30, banks would remain hesitant to lend.
Attempts To Raise Funds
The debt-laden telecom major aims to raise funds by November 2025 to expand its 4G and 5G networks to prevent losing customers to rivals, Bharti Airtel and Reliance Jio. It has been seeking debt financing to support its broader capex plans of ₹50,000 – ₹55,000 crore, with a private credit option explored as a stopgap measure.
Earlier this month, Vodafone Idea reportedly initiated early-stage talks with private credit funds such as Davidson Kempner, Oaktree, and Värde Partners to raise a small tranche of debt.
KPMG has reportedly submitted a revised Techno-Economic Viability (TEV) report to help them access ₹25,000 crore in bank loans.
The AGR Overhang
From FY26, Vi will need to pay over ₹18,000 crore annually for six years, including ₹16,428 crore for AGR dues and ₹2,539 crore for deferred spectrum obligations in FY26 alone.
The company’s woes have worsened following a Supreme Court decision rejecting its plea to waive ₹45,000 crore in interest and penalties on AGR dues. With the four-year moratorium on AGR payouts ending in September, Vodafone Idea faces a tightening financial squeeze.
Meanwhile, Bharti Airtel has also sought relief, asking the DoT to convert part of its ₹40,000 crore dues into equity. The government now faces the difficult task of balancing sector stability with fiscal prudence.
Q1 Snapshot
The company posted a net loss of ₹6,608 crore, slightly wider than the ₹6,432 crore loss reported last year but less than its March-quarter loss of ₹7,166 crore. Its consolidated revenue from operations during the quarter stood at ₹11,022 crore, a 5% increase year-on year.
Retail Sentiment Plunges
On Stocktwits, retail sentiment fell to ‘extremely bearish’ from ‘bearish’ a day earlier.
The stock has fallen 16.5% so far this year.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<