Government may no longer be considering any relief on the adjusted gross revenue (AGR) dues, and the Cabinet Secretariat has informed the Department of Telecom about the decision, CNBC-TV18 reported on March 19 citing sources, in a major setback for telecom operator Vodafone Idea and Bharti Airtel, sending their shares off highs.
A proposal had been floated by the DoT, as per which 50% waiver on interest component was being considered, and a 100% waiver on the penalty and interest on penalty that were levied after the Supreme Court ruling of 2019, and which was reportedly under consideration.
Shares of Vodafone Idea were sharply off highs after the development was reported on March 19. Some estimates project the AGR dues for Voda Idea to the tune of Rs 80,000 crore, and up to Rs 44,000 crore for Bharti Airtel as of date.
Earlier this year, the Supreme Court has rejected review petitions by telecom operators that were seeking to set aside its 2021 ruling which had turned down the 'rectification' of errors in the DoT's calculation of the AGR dues. A waiver from the government was seen as the final hope of relief for the telecom operators after the apex court turned down pleas to review the AGR dues for arithmetic or computational errors.
Telecom Minister Jyotiraditya Scindia had spoken to Moneycontrol exclusively on March 18, but did not comment on the AGR issue. He declined to comment on reports suggesting that the government is considering a Rs 1 lakh crore waiver of AGR dues, and said, “...at this point, I will not comment on that because that's not on my table.”
However, Vodafone Idea's CEO Akshaya Moondra had expressed confidence on February 12 in the resolution of the AGR issue.
"..the government is very cognizant of the fact that support is required at this time. They have also seen that we have raised equity of Rs 26,000 crore overall through promoters, FPO vendors, converting some of their dues in the last 10 months or so. And what we have made the investment we started the investment cycle, we have seen positive results coming out of that. And government is actually the largest stakeholder in this entire exercise, so they are cognizant of this fact and confident that they will find a solution," Moondra had told analysts during the Q3FY25 earnings call.
Clarity on AGR dues was being tracked by lenders to Voda Idea as well, who were awaiting clarity on the issue and the government’s final stance. The telecom operators are expected to repay the AGR dues to the government from FY26 onwards, once the four-year moratorium ends in September 2025. Voda Idea is expected to repay over Rs 28,500 crore in FY26 as AGR dues, and nearly Rs 43,000 crore between FY27-31, as per industry estimates.
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