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AGR verdict puts Bharti Airtel back in focus, Vodafone Idea to struggle: Rusmik Oza

The Supreme Court verdict is not as beneficial for Vodafone Idea as it is to Bharti Airtel. Vodafone was looking forward to a 20-year payment cycle which has now reduced to 10 years.

September 02, 2020 / 10:37 AM IST

The AGR verdict is a positive for Bharti Airtel as it has got ten years to pay the spectrum charges out of which it needs to pay only 10 percent upfront.

As per media articles, the total dues of Bharti Airtel works to nearly Rs 44,000 crore out of which it has already paid nearly Rs 18,000 crore.

Hence, Bharti has already paid more than 10 percent of the upfront requirement. Bharti has already provided for nearly Rs 47,000 crore in its books, hence, there should not be any negative impact on P&L going forward.

Impact, if any, could be positive on any reversal of provision. As per our estimates, the company should be generating healthy free cash flows from FY21 onwards and in this context annual AGR payment of nearly Rs 4,400-4,700 crore should not be an issue.