Vodafone Idea shares surge 12% after government says not opposing relief plea

Shares of Vodafone Idea Ltd. gained 12% after the Centre told the Supreme Court that it does not oppose Vodafone Idea's plea on AGR dues, but some solution is required as the Centre is also an equity holder.

The Supreme Court observed that there has to be some finality to these proceedings. It has deferred the hearing of Vodafone Idea's plea to September 26.

Earlier this week, the Supreme Court Registry had assigned September 19 as the date of hearing for debt-laden telecom company Vodafone Idea's plea against the Department of Telecom's (DoT) additional adjusted gross revenue (AGR) demand.

The company petitioned the top court to set aside DoT's demand for ₹9,450 crore in additional AGR dues, arguing that it goes beyond the scope of the Court's previous ruling on AGR liabilities.

As per reports, the DoT filed an affidavit defending its stance, saying the additional dues represent a 'gap' from previous accounting and is not a reassessment. It maintains these liabilities emerged after the completion of financial accounts and were not covered under the Supreme Court's 2019 judgment.

Of the ₹9,450 crore, as much as ₹2,774 crore comprises the FY18-19 dues of the merged entity — Vodafone Idea and Idea group post their August 2018 consolidation. Meanwhile, ₹5,675 crore pertains to the pre-merger Vodafone Group.

Vodafone Idea contested the calculation, claiming some of the amounts were duplicated and sought fresh reconciliation starting from pre-FY17.

Chandra Sekhar Pemmasani, the minister of state for communications, had told CNBC-TV18 that the Centre would not extend any additional relief to the financially-stressed telecom firm.

Pemmasani, referring to the 2021 support package, under which around ₹53,000 crore of dues were converted into equity, giving the Centre a 49% stake, said, "Whatever we wanted to do has already been done. Vodafone is up to their management… they know how to manage and it's up to them to take it forward."

On July 2, telecom minister Jyotiraditya Scindia had also told CNBC-TV18 that the Centre does not have any plans to convert Vodafone Idea into a public sector undertaking (PSU).

Vodafone Idea shares witnessed a sharp rise after the Centre said it did not oppose the company's plea on AGR dues. The shares gained were up 11.73% at ₹8.76 apiece on Friday. The stock has gained 33% in the past month.

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