Investors in Vodafone Idea saw a significant rally recently, with the telecom major's share price jumping over 7%. This surge came after a crucial development in the long-standing Adjusted Gross Revenue (AGR) case, where the Central government informed the Supreme Court that it was not opposing Vodafone Idea's plea and emphasized the urgent need for a resolution. This unexpected softening of stance from the government, which is also an equity holder in the company, has sparked optimism regarding the telco's financial outlook and its ability to navigate its substantial dues.
During the court proceedings, the government's Solicitor General stated, "Not opposing Vodafone Idea plea, some solution is required, government is also an equity holder. Some solution may be required, subject to Supreme Court approval." This acknowledgment of the government's dual role as both regulator and stakeholder, coupled with the Supreme Court's observation that "there has to be some finality to these proceedings," signals a potential shift towards finding a pragmatic solution. The matter has now been set for further hearing, keeping investors on the edge of their seats for what could be a pivotal decision.
The AGR dispute has been a massive overhang for Indian telecom companies for years. It originated from the Supreme Court's October 2019 ruling that upheld the Department of Telecommunications' (DoT) definition of AGR, leading to colossal dues. While the court granted a 10-year window for repayment in September 2020, subsequent pleas by Vodafone Idea for reassessment of alleged calculation errors were dismissed in July 2021. Vodafone Idea's latest plea, filed on September 8, seeks a comprehensive re-assessment of all AGR dues up to FY 2016-17, hoping to rectify discrepancies and potentially reduce its financial burden.
