'Liability Remains': Why Experts Say Vodafone’s AGR Relief Will Disappoint Market

Market experts expressed caution over the development. SEBI-registered analyst Avinash Gorakshakar spoke to NDTV Profit and said the market is unlikely to view the move positively as the liability continues to remain, despite being backed by funding.

He said, "My sense is that the market will not take this very positively because the liability continues to remain, although it is now backed by funding. Whatever upside the market had seen was based on the expectation that the penalty could be waived by 30–40% and that the company would get a much longer moratorium."

Gorakshakar added that until the management explains the overall structure of the deal and its repayment strategy, the stock is likely to remain negative.

Legal experts also flagged potential challenges. Swapnil Kothari, senior lawyer at the Supreme Court, said, “You waive off a massive amount – tens of thousands of crores – because you have received some stake or based on internal calculations. However, you do not get a five-year moratorium simply because you have a better reputation. Bharti Airtel could also say, ‘You did this for them—why not for us?’"

"If the government does not extend similar relief, it invites litigation. They could approach the Supreme Court under Article 14 of the Constitution, arguing discrimination among service providers operating in the same competitive space," added Kothari.

Kothari also hopes that the taxpayers are not burdened by the moratorium. "When the government grants such a large moratorium on such a significant amount, it ultimately places a burden on taxpayers. With the budget coming up in two months, I hope this doesn’t subtly translate into increased pressure on taxpayers."