Vodafone Idea Says In Talks With Centre After AGR Ruling Setback
During a concall, Vodafone Idea's senior management indicated that debt worth Rs 17,000 crore can be converted into equity.
Days after the Supreme Court struck down its plea for re-computation of adjusted gross revenue or AGR dues, Vodafone Idea Ltd. on Monday said it has reached out to the government over the issue.
The company has initiated a fresh dialogue with the government for remedies on AGR dues, the telecom firm's top management said in a conference call with analysts and investors.
Vodafone Idea's AGR liability stood at Rs 70,300 crore as of June 2024, which makes up 33% of its gross debt. Re-computation of the dues would have cut down the AGR by Rs 30,000–35,000 crore.
The company believes that to compute the AGR, only telecom revenue should be considered and non-telecom revenue should be excluded. However, the apex court on Sept. 19 ruled against its plea.
Vodafone Idea's top management said this is likely to be the final outcome from the court, and any reconsideration into the matter could be made only by the government.
The company said that its "merits on AGR dues are quite strong," and it is in the "process of putting a request with the government for AGR dues."
Confident Of Turnaround
During the concall, Vodafone Idea said it "firmly believes in our turnaround." The capital expenditure guidance of the company stands at about Rs 55,000 crore, it noted.
The telco is confident of using cashflow generated by its business to pay dues to the government, clear outstanding bank debt, and also repay a part of the vendor overdues.
The company has bank loans worth about Rs 4,800 crore, the management said.
Starting in fiscal 2026–27, the total payout is Rs 43,000 crore annually. Out of that, Rs 17,000 crore is in the form of deferred series of installments, which can be converted to equity, the company added.
Vodafone Idea, which recently raised its tariff, expressed the need for a hike at a similar level after a 15-month cycle. The industry will need to further revise the prices going ahead, the management said.
Currently, the focus is on 4G deployment, whereas the monetisation of 5G is "still not happening," the company said. However, the 5G network would be launched in all 17 priority circles, it added.
Shares of Vodafone Idea closed 3.34% higher at Rs 10.82 apiece on the NSE, compared to a 0.57% rise in the benchmark Nifty 50. Among 22 analysts tracking the stock, 15 have a 'sell' rating, three suggest a 'hold' and four recommend 'buy', as per Bloomberg data.
