Vodafone Idea Share Price Surge: Analysts suggest options before the government for AGR dues

Shares of Vodafone Idea surged nearly 10% on Monday, October 27, after the Supreme Court said in its hearing that it sees no reason as to why the centre cannot reconsider the issue of additional AGR dues for which the telecom operator had approached the Apex Court.

The Supreme Court stated that the order is applicable only in the peculiar facts and circumstances of this case, given the equity stake and the 20 crore customers that the telecom operator has.

So what options does the government have for Vodafone Idea, especially considering the fact that it has a 49% stake in the telecom operator and is the single largest shareholder as well.

Here's what analysts had to say:

• Extending the timeline for repayment of AGR dues, which ends in March 2031.


• Waive off the 50% of interest and 100% of penalty and interest on penalties, pertaining to these AGR dues.


• Rectifying the calculation errors.

The government, represented by Solicitor General Tushar Mehta, said that they are not going to be going for recomputation of the AGR dues, but they will be proposing a solution, subject to approval from the Supreme Court.

How can any potential relief help Vodafone Idea?

Analysts believe that any potential relief on the AGR dues front will reduce the cash flow burden for the company and will also ease the company's plans to raise bank debt to the tune of ₹25,000 crore.

Vodafone Idea had already raised ₹18,000 crore in 2024 through India's largest Follow-on Public Offer (FPO) and a fund infusion from the promoters as well worth over ₹2,000 crore.

What Remains Unclear?

The Supreme Court order states that this is applicable only to peculiar facts and circumstances of this case, due to the equity stake and the 20 crore customers that Vodafone Idea has.

However, lawyers point out that this is in the policy domain of the government, and that the centre has now been given a free hand by the apex court by providing legal cover to any relief.

It remains to be seen whether other telecom incumbents would make similar petitions for relief with regards to their AGR dues.

Shares of Vodafone Idea are off the highs of the day, but are trading 4.1% higher at ₹10. The stock made an intraday high of ₹10.57, which was very close to its FPO price of ₹11 per share. The intraday high was the highest level for Vodafone Idea since September 2024.