Vodafone Idea shares continued to decline on Friday, September 20, following the Supreme Court’s rejection of the telco’s plea for a re-computation of adjusted gross revenues (AGR). The stock was down by nearly 5%, trading at ₹9.88 per share on the NSE, after plunging around 20% the previous day.
AGR is a crucial factor in determining the revenue-sharing model between telecom operators and the government. While telecom companies, including Vodafone Idea, argued that AGR should only include core telecom revenues, the Department of Telecommunications (DoT) maintained that all revenues, including non-telecom services, should be considered.
In 2019, the Supreme Court ruled in favor of the DoT, concluding a 14-year legal battle and significantly increasing financial liabilities for telecom companies. Vodafone Idea and Bharti Airtel were hit hard, collectively owing over ₹90,000 crore. Both firms filed curative petitions challenging the calculations, but the court ordered the dues to be paid in installments over 10 years, starting in 2021.
In an attempt to revive its finances, Vodafone Idea launched a follow-on public offer (FPO) worth ₹18,000 crore earlier this year. The fundraise was aimed at improving its position in the telecom market.
The funds were expected to support Vodafone Idea in rolling out 5G services, strengthening 4G operations, and settling vendor payments.
