Vodafone Idea shares jump 4% as report says AGR dues to be halved after reassessment

Vodafone Idea share price

• Vodafone Idea shares rose 4 percent after reports of possible AGR dues reduction
• Cabinet approved 5-year moratorium, relief package for Vodafone Idea's AGR dues.
• Government may exit Vodafone Idea if it can sell its stake at a profit

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The shares of Vodafone Idea jumped around 4 percent on January 2 after a report claimed that the AGR dues of the company may be reduced significantly after the reassessment by the DoT committee.

The shares of the company rose to Rs 12.05 apiece on Friday, extending gains for the second consecutive session. Additionally, another report said that the company the AGR relief package recently approved by the Union Cabinet is setting the stage for the government’s exit from the telecom company.

DoT to reduce Vodafone Idea's AGR dues?

Vodafone Idea has technically received a 10-year breather to pay more than 95 percent of its AGR dues, the Economic Times reported citing officials. Speaking about the freeze on Vi’s dues worth Rs 87,695 crore, the officials told ET that the amount can go down substantially by over 50 percent after DoT ressessment, and whatever the amount is, will have to be paid by FY36-41.

The government has basically granted Vodafone Idea the necessary time to recover, another official cited by the news publication said.

Moneycontrol couldn't independently verify the report.

Govt to exit Vodafone Idea?

The adjusted gross revenue (AGR) relief package recently approved by the Union Cabinet may have set the stage for the government’s possible exit from the debt-ridden telecom giant, Indian Express reported citing people familiar with the matter.

An investor from the private sector may also come in as the possibility is currently under consideration, the report added, citing top government sources. This comes as the Cabinet’s decision to freeze the telco’s heft AGR dues worth Rs 87,695 crore for the next five years affords visibility over future liabilities, a precondition put forth by the private sector, it further said.

Two big corporate groups have shown interest at different points to time to invest in Vodafone Idea, the report claimed. However, it noted that the government would only exit if it can sell its stake with a profit, and no decision has yet been taken.

Moneycontrol couldn't independently verify the report.

The government became the largest shareholder in Vodafone Idea in March this year after converting dues worth Rs 36,950 crore into equity, taking its stake to nearly 49 percent. Earlier, in 2023, the Centre had picked up a 33 percent stake in lieu of statutory dues exceeding Rs 16,000 crore.

Cabinet likely approves Vodafone Idea's AGR relief package:

The Union Cabinet had approved an adjusted gross revenue (AGR) relief package for Vodafone Idea, sources told Moneycontrol on Wednesday. The government has given its nod for a 5-year moratorium on the AGR dues of the telecom giant, they added.

A DoT committee will be formed to give relief to the telco by recalculating and revaluating the AGR dues, including considering interest and penalty reversal if any, the government sources said, adding that the committee may reassess the frozen AGR dues based on audit reports.

The Cabinet approved the freezing of Vodafone Idea's AGR dues worth Rs 87,695 crore, whose payment is now being rescheduled to FY32-FY41, they added. AGR dues of FY18 and FY19 shall be payable by the company over the next five years, the sources said.

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