Vodafone Idea shares rise 9% as telco to get Rs 5,836 crore from Vodafone Group

Vodafone Idea shares rise in trade.

• Vodafone Idea shares rose over 4 percent after news of Rs 5,836 crore settlement
• Vodafone to release Rs 2,307 crore to Vi in next 12 months under new agreement
• Cabinet likely approved five-year moratorium on Vodafone Idea's AGR dues

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Vodafone Idea shares rose 9 percent on January 1 as the telco will receive around Rs 5,836 crore from Vodafone Group as part of re-settlement of a liability claim pact between the two companies, according to regulatory filings of both companies.

Under the revised agreement, Vodafone Group promoters will release Rs 2,307 crore over the next 12 months for Vodafone Idea as per the terms agreed in the amendment agreement.

Vodafone Group has also set aside its 328 crore shares held in Vi for Vi's benefit.

A Contingent Liability Adjustment Mechanism (CLAM) was entered between Vodafone Group and Vodafone Idea (Vi) at the time of the 2017 merger agreement between Vodafone India and Idea Cellular and covers pre-merger contingent liabilities in relation to legal, regulatory, tax, and other matters of the two merging parties.

Under the CLAM, Vodafone's maximum exposure was capped at Rs 8,369 crore at the time of the merger and taking into account payments already made, the reduced exposure was capped at Rs 6,394 crore and the deadline for the pact after an extension was December 31, 2025.

This comes after the Union Cabinet likely approved a five-year moratorium on the company’s adjusted gross revenue (AGR) dues.

At 11:10 am on January 1, Vodafone Idea stock was trading 9% higher at 11.71.

The Cabinet on December 31 likely approved a proposal to freeze Vodafone Idea’s AGR dues at Rs 87,695 crore as of December 31 and reschedule the repayments over FY2032–41. The decision also allows for a reassessment of the dues by a government-appointed panel, government sources told Moneycontrol.

Vodafone Idea AGR dues: Cabinet approves five-year moratorium

The Department of Telecommunications (DoT) will reassess the dues based on deduction-verification guidelines and audit findings. A committee appointed by the government will determine the final payable amount, which will be binding on both the company and the Centre.

The move was taken in public interest and to avoid excessive concentration in the telecom sector, government sources said.

However, after market hours on Wednesday, Vodafone Idea said it had not received any communication from the government regarding the reported AGR relief.

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