Vodafone Idea shares tumble nearly 11 pc

New Delhi, Dec 31 (PTI) Shares of Vodafone Idea tumbled nearly 11 per cent on Wednesday as the governments bailout package fell short of market expectations of a waiver of a part of the AGR dues.

The stock tanked 10.85 per cent to settle at Rs 10.76 on the BSE. From its 52-week high of Rs 12.80, the stock faced heavy selling during the fag-end of trade. It dropped 14.99 per cent to Rs 10.26 during intra-day trade.

At the NSE, the stock tumbled 10.77 per cent to end at Rs 10.76.

The government on Wednesday approved a major relief package for Vodafone Idea, freezing its outstanding dues and approving a five-year moratorium on payments, providing a critical lifeline to the debt-laden telecom operator.

The Union Cabinet, headed by Prime Minister Narendra Modi, agreed to freeze AGR dues of Vodafone-Idea Ltd (VIL) at Rs 87,695 crore, which the struggling company has to start paying from 2031-32 fiscal year and clear by 2040-41, sources aware of the decision said.

AGR dues refer to payments owed by telecom companies to the government based on Adjusted Gross Revenue (AGR). It is the revenue on which telecom operators must pay licence fees and spectrum usage charges. It is defined to include all revenues, even non-telecom income (like interest, rent, asset sales).

Besides these outstanding, the AGR dues for 2017-18 and 2018-19, which were finalised based on the Supreme Court order of September 2020, will now have to be paid over 2025-26 to 2030-31 fiscal year without any change, they said.

Vodafone Idea has been battling a prolonged financial crisis, driven by intense price competition, high debt, and massive AGR liabilities that arose from a change in the definition of AGR.

The company has struggled with persistent losses, a shrinking subscriber base, and limited ability to invest in network expansion, even as rivals accelerated 4G and 5G rollouts.

Repeated rounds of government relief and equity conversion of dues have kept the company afloat, but its long-term viability continues to hinge on sustained policy support, fresh capital infusion, and a turnaround in operating performance.

Some had expected that the Cabinet would waive a part, if not all, of the AGR dues. But instead, it decided to give a moratorium, which would allow the company to recover. PTI SUM TRB