The hearing for Vodafone Idea’s complaint against the Department of Telecom’s (DoT) assessment of the additional Adjusted Gross Revenue (AGR) dues is tentatively scheduled for September 19. This news caused the shares to spike higher by more than 6% in early trading. The telecom company had petitioned the Supreme Court to overturn the DoT’s additional demand for Rs 9,450 crore in AGR dues, claiming that the demand went beyond the parameters of the Court’s previous decision on AGR liabilities. The DoT is anticipated to submit a defense of the demand as a “gap” in previous accounting, which was not computed at the time of the Supreme Court’s ruling in 2019, according to a story published earlier on September 12, which cited persons familiar with the matter. The DoT filed an affidavit in this regard with the supreme court, arguing that the additional demand was justified by the completeness of financial accounts rather than a reevaluation or recalculation. For FY18–19, the DoT had made an additional claim on AGR dues totaling Rs 2,774 crore. According to the plea, of the Re 9,450 crore demand, Rs 2,774 crore is related to the post-merger entities — Idea Group and Vodafone Idea — after their August 2018 consolidation, and Rs 5,675 crore is related to the liabilities of the pre-merger Vodafone Group. Vodafone Idea has challenged the computation, arguing that some values should be reconciled because they were added twice. The business has requested that the dues be recalculated, beginning with the pre-FY17 period.
The telecom giant has been negotiating with banks for more finance, and the talks are progressing. “At the moment, the banks are seeking clarification over the AGR front. During the June quarter earnings call, Vodafone Idea CEO Akshaya Moondra stated, “That is where we are engaged with the government,” indicating optimism in a resolution to the AGR problem. In addition to looking at non-banking sources of funding, Vodafone Idea is eager to continue the capital expenditures that have been ongoing since last year. “The government has consistently shown assistance in the past. You examine the following: the deferment of spectrum installments in 2019, the Reforms Package in 2021, the conversion of government debt to equity in 2023, and the conversion of government debt to equity once more in 2025. “In general, these actions have occurred,” Akshaya Moondra stated in August, adding, “We have asked the government to settle this matter before the March deadline so that banks have clarity and we can move forward with bank funding.”
Vodafone Idea’s stock has increased by 25% in the past month and is currently trading flat year-to-date.
