Shares of Vodafone Idea Ltd fell sharply on Thursday, October 30, after the Supreme Court’s written order on the company’s adjusted gross revenue (AGR) dues raised doubts about the extent of relief available to the telecom operator. The stock declined 7.90%, to trade at Rs. 8.63 per share around 10:30 AM, as investors reacted to the verdict.
The Supreme Court, in its judgment released earlier this week, clarified that its order applies only to Vodafone Idea and pertains solely to the additional AGR demand of Rs. 9,450 crore raised for the period up to FY2016-17.
The apex court noted that “the prayer in the petition itself restricts its claim only to the additional AGR demand raised by the respondent for the period up to the financial year 2016-17.”
This interpretation effectively narrows the scope of relief, disappointing investors who had initially expected broader flexibility for the government to reassess the company’s entire AGR liability, estimated at Rs. 83,400 crore.
The Supreme Court also emphasized that the order was passed considering the “facts and circumstances” related to Vodafone Idea’s case, ruling out similar relief for peers like Bharti Airtel, whose shares also slipped around 1.5% in early trade.
According to IIFL Securities, the judgment leaves uncertainty on whether the government’s flexibility extends to the entire AGR liability or is confined only to the Rs. 9,450 crore additional demand.
Meanwhile, Emkay Global Financial Services reiterated a ‘Sell’ rating on the stock with a target price of Rs. 6, citing weak fundamentals, limited relief prospects, and mounting leverage.
The brokerage said Vodafone Idea’s debt, estimated at Rs. 1.18 trillion (excluding AGR dues), remains unsustainable relative to its FY25 EBITDA of Rs. 92 billion.
Vodafone Idea has been struggling for a long time with a considerable debt burden, with dues linked to spectrum, AGR, and other government obligations. The firm has issued repeated warnings that such burdens create a major risk to its viability and workforce that exceeds 18,000.
Despite the limited scope of the Supreme Court’s order, analysts believe the government could still take a “holistic view” to ensure telecom sector stability.
Vodafone Idea’s stock, which briefly surged past Rs. 10 per share earlier this week following the Supreme Court’s remarks, has since lost all gains.
While the stock is still up 2.3% over the past month, investors are cautious as the AGR uncertainty resurfaces, dampening optimism over the telecom operator’s recovery trajectory.