Vodafone Idea share price falls 5% after PIL challenges DoT move on AGR
The plea was filed by the Consumer Rights Foundation, which says DoT’s latest directions amount to contempt of court.
January 27, 2020 / 03:43 PM IST
Vodafone Idea (Representative Image)
Vodafone Idea share price declined almost 5 percent in intraday trade on BSE on January 27 after a public interest litigation (PIL) was filed in the Supreme Court against a recent Department of Telecommunications (DoT) direction on adjusted gross revenue (AGR) dues.
The plea was filed by the Consumer Rights Foundation, which said the DoT’s order amounted to contempt of court.
The telecom department decided to put on hold further action till the top court heard the application filed by the operators for extending the deadline for paying AGR dues.
The Supreme Court on October 24 ordered telecom companies to pay Rs 1.47 trillion after dismissing their plea challenging the definition and applicability of AGR. The payment was to be made within 90 days of the judgment, which was January 24.
While Reliance Jio complied with the order, Bharti Airtel, Vodafone Idea and Tata group requested the top court for a relaxation in the payment deadline.
Vodafone Idea’s dues add up to more than Rs 50,000 crore, if paid as a lumpsum. For the company, which has been on thin ice since the merger, it means shutting down of its operations, experts say.
Read more: Do or die situation for Vodafone Idea; all eyes on apex court for a new lease of life
Meanwhile, India Ratings and Research on January 24 downgraded the rating of Rs 3,500 crore non-convertible debentures of Vodafone Idea on account of liabilities related to adjusted gross revenue dues. The NCDs were issued by erstwhile Vodafone Mobile Services.
The rating was downgraded to 'IND BBB' from 'IND A+' and placed it in "rating watch negative", indicating a chance of further lowering of the company’s ability to pay for the debt note.
At 1510 hours, Vodafone Idea shares were trading 3.80 percent low at Rs 5.82 on BSE.