Vodafone Idea shares in focus ahead of Supreme Court hearing on AGR dues petition

Shares of Vodafone Idea Ltd. are in focus on Friday, September 26, as the Supreme Court is set to hear the debt-ridden telecom company's plea against the Centre's Adjusted Gross Revenue (AGR) demand today.

During the SC hearing last week, the Centre told the top court that it does not oppose the telecom company's plea on adjusted gross revenue (AGR) dues. However, some solution is required as the Centre is an equity holder as well.

The government is the largest shareholder in Vodafone Idea, holding a 49% stake, but is not classified as a promoter.

The Supreme Court had observed that there has to be some finality to these proceedings and had deferred Vodafone Idea's plea to Friday, September 26 during last Friday's hearing.

Debt-laden Vodafone Idea's plea is against the Department of Telecom's (DoT) additional AGR demand. It petitioned the Supreme Court to set DoT's demand for ₹9,450 crore in additional AGR dues, arguing that it goes beyond the scope of the top court's previous ruling on AGR liabilities.

As per reports, the DoT had previously filed an affidavit defending its stance, saying the additional dues represented a 'gap' from previous accounting and was not a reassessment. It maintained that these liabilities emerged after the competition of financial accounts and were not covered under the Supreme Court's 2019 judgment.

Of the ₹9,450 crore, a total of ₹2,774 crore comprises the FY18-19 dues of the merged identity Vodafone Idea and Idea group, after their consolidation in August 2018. As much as ₹5,675 crore is with regards to the pre-merger Vodafone Group.

The telecom company contested the calculation, claiming some amounts were duplicated and sought fresh reconciliation starting from pre-FY17.

The minister of state for communications, Chandra Sekhar Pemmasani, had told CNBC-TV18 that the Centre was not looking at extending any additional relief to the financially-stressed telecom company.

Referring to the 2021 support package, as per which around ₹53,000 crore of dues were converted into equity, giving the Centre a 49% stake, Pemmasani 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."

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

Shares of Vodafone Idea ended 1% higher on Thursday at ₹8.68. Since last Friday's hearing, the stock is up 11%, but continues to remain below its FPO price of ₹11.

In the past month, the stock has risen 29.4% but is up 8.4% this year, so far.

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