The government is reportedly evaluating a major relief proposal for telecom companies, including Vodafone Idea and Bharti Airtel, which involves waiving 50% of interest and the entire penalties on adjusted gross revenue (AGR) dues. If implemented, this measure could offer financial relief exceeding ₹1 lakh crore to the sector, with Vodafone Idea expected to gain over ₹52,000 crore and Bharti Airtel nearly ₹38,000 crore.
According to a report by IIFL, Vodafone Idea and Bharti Airtel stand to benefit significantly if the government announces a potential AGR relief. The report estimates that Vodafone Idea’s stock could witness a per-share upside of ₹7, while Bharti Airtel may see an increase of ₹62 per share.
The AGR relief is expected to waive 50% of interest and 100% of penalties on AGR dues. This move could reduce liabilities by ₹520 billion for Vodafone Idea and ₹380 billion for Bharti Airtel. Analysts believe such a measure would strengthen Vodafone Idea’s revival efforts, paving the way for a ₹250 billion debt raise and enabling a ₹500-550 billion capex program through FY27.
The relief, which is reportedly being discussed at the highest levels of the government, including the finance ministry and DoT, could be announced in the Union Budget on February 1. If implemented, the AGR relief could also improve Bharti Airtel’s free cash flow significantly, enhancing its strong financial position further.
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