Vodafone Idea's case against Department of Telecom's (DoT) assessment of the additional Adjusted Gross Revenue (AGR) dues is tentatively listed for hearing on September 19, as per news reports, sending the shares sharply higher by over 6 percent in early trade.
The telecom firm had moved the Supreme Court seeking to quash the additional demand of AGR dues worth Rs 9,450 crore by the DoT, and argued that the demand exceeds the scope of the Court’s earlier ruling on AGR liabilities.
Earlier on September 12, the Economic Times had reported citing people familiar with the development that the DoT is expected to file a submission defending the demand as a 'gap' in prior accounting, which was not calculated at the time of the Supreme Court's order in 2019. An affidavit in this regard was filed by the DoT before the apex court, the report said, justifying that the additional demand was not a reassessment or recalculation but due to completion of financial accounts.
What the DoT is Seeking
The DoT had raised an extra demand on AGR dues worth Rs 2,774 crore for FY18-19. The petition said that out of the total Re 9,450 crore of demand, Rs 2,774 crore pertains to post-merger entity — Idea Group and Vodafone Idea — following their August 2018 consolidation, while Rs 5,675 crore relates to the pre-merger Vodafone Group’s liabilities. Vodafone Idea has contested the calculation, claiming that certain amounts have been added twice and need reconciliation. The company has asked for a recalculation of dues, starting from the pre-FY17 period.
Vi Engaged with the Centre
The telecom major has been engaged with banks over additional funding, and those discussions have been moving forward. "The banks are currently looking for some clarity on the AGR front. So that is where we are engaged with the government," Akshaya Moondra, CEO of Vodafone Idea said during the June quarter earnings call, expressing confidence of a solution to the AGR issue.
Vodafone Idea has been keen on continuing the capex, which has been going on since last year, and is looking at non-banking sources of funding too. "In the past, we have always seen that government has been supportive. You look at 2019 deferment of spectrum instalments, 2021 Reforms Package, 2023 conversion of government dues to equity, 2025 again, conversion of government dues to equity. Generally, these actions have happened," Akshaya Moondra said in August, adding, "Our request to the government has been that let us resolve this earlier than before the deadline of March, so that banks get clarity and we can proceed with bank funding."
Shares of Vodafone Idea are higher by 25 percent over the last one month and are trading flat on YTD basis.
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