New Delhi, October 27 (Monday): Shares of Vodafone Idea Ltd surged sharply by 7.28% to ₹10.32 in Monday’s session after the Supreme Court observed that there is “no reason why the Centre should be prevented from reconsidering the issue” related to the company’s additional AGR dues for FY2016–17.
The development marks a major positive for both Vodafone Idea and Indus Towers, as it signals potential relief on the company’s pending dues and renewed government support in light of the Centre’s 49% equity stake in the telecom operator.
Supreme Court’s key observation
The bench headed by Chief Justice BR Gavai stated:
“Taking into consideration the change in circumstances, with the Government of India holding 49% equity and over 20 crore consumers using the services of the petitioner, we see no reason why the Union should be prevented from reconsidering the issue and taking appropriate steps.”
Market reaction and implications
Following the court’s remark, Vodafone Idea shares spiked 7.28% to ₹10.32, compared to the previous close of ₹9.62. The stock’s intraday range was between ₹9.28 and ₹9.80, with a market capitalization of ₹1.01 trillion.
The ruling is also seen as positive for Indus Towers, which has significant exposure to Vodafone Idea as one of its largest clients. Any regulatory or financial relief for Vodafone Idea could improve its payment outlook, directly benefiting Indus Towers’ receivables and stability.
Background
Vodafone Idea had filed a plea seeking to quash the Department of Telecommunications’ (DoT) additional AGR demand of ₹9,450 crore for FY2016–17 and to reassess all dues comprehensively. The company argued that the demand was unsustainable since liabilities had already been crystallised by the Supreme Court’s 2019 AGR judgment.
The government’s willingness to reconsider the issue reflects its dual role as a regulator and a major shareholder, aiming to protect both competition in the telecom sector and consumer interest, given the company’s large subscriber base.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
