Vodafone Idea sees profit booking: Telco's shares fall 3% after 23% rally in 8 sessions

Vodafone Idea sees profit booking: Telco's shares fall 3% after 23% rally in 8 sessions

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Vodafone Idea stock saw profit booking on September 16 after it rallied over 20% in previous eight sessions.

At 10:25 am on September 16, Vodafone Idea stock on NSE was trading 3% lower at Rs 7.9, a day after it rallied 7% ahead of the Supreme Court hearing on the additional Adjusted Gross Revenue (AGR) dues, tentatively scheduled for September 19. The telecom firm had challenged the Department of Telecom’s (DoT) assessment on additional AGR.

The 52-week high of the stock is Rs 13.5 and 52-week low is Rs 6.12. The market capitalisation of the stock is Rs 85,300 crore.

Vi's SC plea

Vodafone Idea has moved the Supreme Court seeking to quash an additional Rs 9,450 crore AGR demand by the Department of Telecommunications (DoT), arguing that the fresh dues exceed the scope of the Court’s earlier ruling on AGR liabilities.

The telecom operator’s petition challenges the DoT’s revised calculations covering dues up to FY17 and the updated licence fee obligations for both the Idea Cellular group and Vodafone Idea Limited through FY19.

These revised dues fall under the government’s moratorium on AGR payments, which ends on March 31, 2026, after which Vodafone Idea will have to begin making instalments.

As part of its latest assessment, the DoT has raised an extra demand of Rs 2,774 crore for FY18-19. 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.

According to the petition, out of the total Rs 9,450 crore demand, Rs 2,774 crore pertains to the 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 further noted that this total amount, scheduled for payment by 31 March 2026, includes a significant portion of approximately Rs 5,606 crore (as of 31 March 2025) for dues up to FY 2016-17, which had already been settled by the Supreme Court.The Supreme Court had on 18 March 2020 locked Vodafone Idea’s AGR dues till 2016-17 based on calculations by the DoT, adding that no self-assessment or re-assessment of the dues would be permitted.

But DoT has now sought additional payments for up to 2018-19, Vodafone Idea said in its petition dated 8 September.

The telecom operator owes about Rs 83,400 crore in AGR dues to the government, with annual payments of Rs 18,000 crore beginning in March. Overall, Vodafone Idea’s total dues to the government stand at around Rs 2 trillion, including penalty and interest.

The telecom operator requested the Supreme Court to quash DoT’s additional demands for AGR payments up to FY17, and to order a comprehensive reassessment and reconciliation of all AGR dues for that period. Adjusted gross revenue represents a portion of a telecom company's gross revenue that’s considered towards regulatory payments.

Vodafone Idea said the revised demand will worsen its financial strain at a time when it is trying to raise funds to strengthen 4G coverage and accelerate 5G rollout to compete with Reliance Jio and Bharti Airtel.

The substantial liability created by the AGR demand threatened the company’s existence and “the livelihood of thousands of employees working directly or indirectly" with it, the struggling telco said in its petition.

The company has nearly 198 million users and more than 18,000 employees.

According to Vodafone Idea’s latest petition, DoT’s additional demand pertains to dues involving licence fees (calculated as a percentage of AGR). If payment demands towards additional spectrum usage charges for the period up to FY17 are also considered, the amount is about Rs 6,800 crore as on 31 March 2025, it said.