In a major setback for Vodafone Idea Ltd (Vi), the company’s shares tumbled over 12% on Monday, May 13, after the Supreme Court of India dismissed its plea seeking a reassessment of Adjusted Gross Revenue (AGR) dues. The apex court’s decision reaffirms the telecom operator’s liability to pay nearly ₹58,000 crore, intensifying concerns about the financial sustainability of the debt-laden company
The Supreme Court bench, led by Chief Justice D.Y. Chandrachud, denied Vodafone Idea’s petition to recalculate its AGR liabilities, upholding the 2020 verdict that mandated telcos to pay historical dues calculated by the Department of Telecommunications (DoT). The ruling came after Vodafone Idea argued that calculation errors inflated their dues and that relief was necessary to ensure their continued viability.
Following the judgment, Vodafone Idea shares dropped by more than 12% on the Bombay Stock Exchange (BSE), trading at ₹12.58 by mid-day. Investors reacted sharply to the verdict, fearing that the telecom major—already burdened by debt and struggling with customer retention—would find it increasingly difficult to raise funds and meet its obligations.
AGR refers to the revenue that telecom companies earn, based on which the DoT calculates license fees and spectrum usage charges. In 2019, the Supreme Court interpreted AGR to include non-core revenues as well, resulting in a massive jump in payable dues for telecom companies, especially Vodafone Idea and Bharti Airtel.
While Bharti Airtel has largely settled its dues, Vodafone Idea has been at the epicenter of the AGR crisis, with outstanding liabilities exceeding ₹58,000 crore. Despite partial payments and multiple fundraising attempts—including a recent ₹18,000 crore follow-on public offer (FPO)—the telco remains financially strained.
Industry analysts caution that the verdict could significantly impact Vodafone Idea’s long-term viability. “This ruling comes at a time when Vi is in dire need of cash to invest in 5G rollout, upgrade its infrastructure, and retain its user base,” said Suman Das, a telecom analyst at Prabhudas Lilladher. “Investor sentiment is likely to remain negative until there’s a clear roadmap to financial recovery.”
The Department of Telecommunications, on its part, welcomed the judgment, affirming that it strengthens the government’s regulatory stance and brings clarity on dues collection.
📍 Conclusion:
The Supreme Court’s rejection of Vodafone Idea’s plea for AGR recalculation marks a pivotal moment for the Indian telecom sector. With mounting financial obligations and intensifying competition from Reliance Jio and Bharti Airtel, Vodafone Idea’s survival hinges on swift strategic moves, additional capital infusion, and possible government intervention. As uncertainty looms, the fate of India’s third-largest telecom operator remains on a precarious edge.
