Vodafone Idea Says Rs 25,000-Crore Fundraising Is Delayed Over AGR Issue

Vodafone Idea Ltd.'s Rs 25,000-crore fundraising plan is delayed as lenders are in "wait and watch" mode over AGR dues payable to the government.

"We remain actively engaged with our lenders for the debt raise, and I'm personally in talks with them for this," Akshaya Moondra, chief executive officer at the telecom firm, said during a post-earnings call on Thursday.

According to Moondra, the Supreme Court never considered the curative petition on payment of pending adjusted gross revenue dues on merit and rejected it solely on a technicality. He was hopeful that the government recognises this. "Lenders are also closely looking at the AGR matter."

Vodafone Idea is also hopeful of the govenment remaining committed on having three private telecom firms in the market.

The Vodafone Idea fundraising is crucial, for it will aid the debt-laden telco stregthen its 4G network and launch 5G operations. The firm has drawn up a Rs 50-55,000 crore capital expenditure plan for the next three years.

The adjusted gross revenue, or AGR, is the basis of a revenue-sharing mechanism between the government and the telecom operators.

Under this mechanism, the operators have to pay a certain licensing fee and spectrum usage fee to the Department of Telecommunications. The DoT calculates the fee as a percentage of the AGR. However, the definition of what constituted AGR had been a pain point since 2005.

In 2019, the top court ruled that non-core revenues must be included while calculating the AGR, ending a 14-year-long battle between mobile operators and the government over the definition of the AGR.

This ruling dealt a crippling blow to the industry, which faced dues and penalties worth thousands of crores. In September this year, the the top court rejected telecom operators' plea seeking a reconsideration of the verdict.

Vodafone Idea is now looking at some kind of respite on this issue from the government as the case stands settled at the top court level with no other avenues of appeal left. At the end of Q2 FY25, Vodafone Idea's liabilities against the backdrop of the AGR issue stood at around Rs 70,000 crore.