Shares of Vodafone Idea Ltd. fell as much as 16% on Wednesday, slipping below the company’s Follow-on Public Offer (FPO) price of Rs 11, even as reports suggested that the Union Cabinet has approved a long-awaited Adjusted Gross Revenue (AGR) relief package for the debt-laden telecom operator.
According to reports, the Cabinet has cleared a five-year moratorium on AGR payments, offering temporary relief to Vodafone Idea’s strained finances. Despite the positive development, the stock witnessed heavy profit booking, leading to a sharp intraday decline.
As part of the proposed relief measures, AGR dues amounting to Rs 87,695 crore have been frozen, easing near-term cash flow pressure on the company. The payment of these dues is expected to be rescheduled over FY32 to FY41, while the frozen liabilities will be reassessed by the Department of Telecommunications (DoT) based on audit findings.
In addition, AGR dues related to FY18 and FY19 will be payable over the next five years, according to available details. Vodafone Idea has been grappling with a massive dues burden, with total AGR liabilities estimated at around Rs 83,400 crore.
Despite repeated relief measures, the telecom operator has consistently warned that its survival depends on timely funding support, as lenders remain cautious due to its stressed balance sheet. Vodafone Idea employs over 18,000 people and serves nearly 198 million subscribers across India.
A few weeks ago, the Supreme Court allowed the government to undertake a comprehensive reassessment and reconciliation of Vodafone Idea’s dues, including interest and penalties, up to FY17. The decision was widely viewed as a significant relief for the company.
Earlier in September, Vodafone Idea had sought a waiver of penalty and interest on an AGR demand of Rs 9,450 crore raised by the DoT, arguing that a substantial portion pertained to the pre-FY17 period already settled by the apex court in 2020. Of this amount, Rs 2,774 crore relates to post-merger liabilities, while Rs 5,675 crore pertains to pre-merger dues of the Vodafone Group.
The government became the largest shareholder in Vodafone Idea in March this year after converting Rs 36,950 crore of dues into equity, raising its stake to nearly 49%. Earlier, in 2023, the Centre had acquired a 33% stake in the company in lieu of statutory dues exceeding Rs 16,000 crore.
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