Vodafone Idea AGR case: Telco's shares rise 9% as Centre tells SC 'some solution is required'

Vodafone Idea AGR case: Telco's shares rise over 4% as Centre tells SC 'some solution is required'

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26 Aug, 2025 12:21

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Vodafone Idea shares rose 9% on September 19 after the Supreme Court deferred the hearing on the telco’s challenge to a fresh Rs 9,450-crore adjusted gross revenue (AGR) demand from the Centre as the government sought more time to respond.

Solicitor General Tushar Mehta, representing the government, told the bench that since the Centre now holds a substantial stake in Vodafone Idea, a solution that protects consumer interests must be worked out. He urged the Court to list the matter again on September 26 for urgent consideration.

"Not opposing Vodafone Idea plea, some solution is required, government is also an equity holder. Some solution may be required, subject to Supreme Court approval," Centre told the apex court.

At 12:15 pm on September 19, Vodafone Idea shares on NSE were trading 9% higher at Rs 8.56 apiece.

The case stems from the Court’s March 18, 2020 order, which upheld AGR dues up to FY17 as calculated by the Department of Telecommunications (DoT) and ruled out any reassessment by operators.

Despite this ruling, DoT has raised fresh claims for FY18 and FY19. Vodafone Idea, in its September 8 petition, argued that much of the new demand overlaps with periods already settled by the Court.

The government now owns 48.99% of Vodafone Idea, having converted Rs 53,083 crore of dues into equity in two tranches—February 2023 and April 2025.

Of the Rs 9,450 crore demand, Rs 2,774 crore has been raised against Idea Group and Vodafone Idea (post-merger), while Rs 6,675 crore has been directed at Vodafone Group for the pre-merger period.

Vodafone Idea already owes about Rs 83,400 crore in AGR dues, with annual instalments of Rs 18,000 crore starting March. Including penalties and interest, its overall liabilities to the government are estimated at nearly Rs 2 trillion.

In its plea, the company said Rs 5,606 crore of the fresh demand relates to periods up to FY17, which have already been crystallised by the 2020 order. It asked the Court to quash DoT’s new claims for those years and order a full reconciliation of AGR dues.

Vodafone Idea cautioned that the added liability threatens its survival, endangering services to 198 million subscribers and the jobs of over 18,000 employees, along with thousands more indirectly dependent on the company.

The operator also challenged DoT’s revised math on licence fees and spectrum usage charges, saying that if spectrum charges up to FY17 were included, additional dues would stand at around Rs 6,800 crore as of March 2025.

In an August 13 letter, DoT said that updated licence fee dues up to FY19 were not factored into the Court’s September 1, 2020 order. It recalculated the amounts with penalties and interest up to October 2019 and further compounded them at 8% per year until March 2025.

Vodafone Idea, in its August 28 reply, rejected the revised figures, insisting it accepted no liability beyond interest on Rs 58,254 crore and highlighting “material errors” in DoT’s FY18 and FY19 computations.