Vodafone Idea shares slump 12%: Supreme Court limit on AGR relief hits company stock; no mention of waiver on penalties or interest

NEW DELHI: Vodafone Idea’s shares tumbled 12.4 per cent to Rs 8.21 on the BSE on Thursday after the Supreme Court issued its written order on the company’s adjusted gross revenue (AGR) dues, curbing the extent of relief investors had anticipated.

The clarification dented hopes of a broader reprieve for the debt-laden telecom operator.The written verdict stated that the Supreme Court’s October 27 order — allowing the Centre to reconsider Vodafone Idea’s AGR dues — applied only to this case’s specific circumstances. The review, the court said, was limited to the additional AGR demand of Rs 9,450 crore. The order made no reference to the company’s earlier plea seeking waiver of penalties, interest, or interest on penalty — a key relief analysts viewed as vital for easing its financial strain, as reported by ET.According to a note by brokerage IIFL dated 28 October, the Supreme Court’s earlier oral order had “put the ball in the government’s court,” giving it “two options” — either to extend the AGR payment deadline beyond March 2031 or to waive interest and penalties. It added that in either case, the brokerage expected the government to also extend the moratorium on AGR and spectrum payments.However, Thursday’s written clarification dampened those expectations.

IIFL noted that the order’s applicability was confined to Vodafone Idea’s case, implying no similar benefit for Bharti Airtel, whose shares fell about 2 per cent to Rs 2,062 on the BSE.Vodafone Idea’s stock, which had surged to a 52-week high of Rs 10.52 following the initial order, surrendered nearly all gains as sentiment turned cautious. Analysts had initially seen the ruling as a potential breakthrough — with Motilal Oswal terming it “significant” for reducing AGR liabilities and Emkay Capital calling it “crucial for the company’s survival.”The Department of Telecommunications (DoT) had earlier raised an additional AGR demand of Rs 9,450 crore, which Vodafone Idea contested, saying Rs 5,600 crore pertained to periods already settled under the 2020 Supreme Court judgment. The written order confirms that this component remains the sole subject of review.The Solicitor General had earlier informed the court that the issue affected over 200 million subscribers and that the government — which owns a 49 per cent stake in Vodafone Idea — sought a resolution in public interest. While the court has allowed the Centre to re-examine the matter, it remains unclear how the government intends to proceed.IIFL had estimated that a full waiver of interest and penalties could have provided Vodafone Idea with net present value relief of Rs 580 billion, or Rs 5.5 per share.