Vodafone Idea, Indus Towers Fall Most After Supreme Court Verdict On AGR Dues
Vodafone Idea Ltd.'s share price fell below the follow-on-offer price of Rs 11 apiece.
Shares of most telecommunication companies declined on Thursday with Vodafone Idea Ltd. and Indus Towers Ltd. falling the most after the Supreme Court rejected their plea seeking re-computation of average gross revenue or AGR by the Department of Telecommunication.
"Supreme court verdict is a key setback for Vodafone's revival process. Fair value basis sees setback of Rs 5 per share. Vodafone was going to get a significant relief in annual payments from a positive verdict," said Ajai Puri, former Chief Operating Officer of Bharti Airtel Ltd.
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 AGR by Rs 30,000–35,000 crore.
Bharti Airtel Ltd., Vodafone Idea Ltd., and other companies had filed the curative petition in the top court against the September 2020 order which came against telecommunication companies.
These companies paid a hefty amount to clear dues to the government in interest, penalty, and interest on penalty in 2019. In 2020, telecom firms went to Supreme Court and alleged that there was a grave error in the Department of Telecommunication's calculation of average gross revenue dues, coupled with an arbitrary penalty imposed on them.
Among telecom stocks, Vodafone Idea hit 10% lower circuit to Rs 11.61 per share, the lowest level since Oct. 30, 2023. It remained locked in the 10% lower circuit as of 11:54 a.m.
Indus Towers Ltd. shares also hit 10% lower circuit and fell to Rs 430.90 apiece, the lowest level since July 11. It remained locked in the 10% lower circuit.
Shares of Hathway Cable & Datacom Ltd. was the third stock to decline the most. Meanwhile, the Bharti Airtel Ltd. remained higher after the court order.
