Vodafone Idea Stock Slips A Day After Supreme Court AGR Relief
The Supreme Court granted permission to the Centre to reassess and reconcile Vodafone Idea’s pending adjusted gross revenue dues, which currently stand at Rs 5,606 crore.
Vodafone Idea Ltd.'s share price declines over 2% on Tuesday a day after the Supreme Court allowed the central government to reconsider AGR dues issue. Solicitor General Tushar Mehta highlighted that the government owns 49% stake in the carrier that serves 20 crore customers in India.
Citi also noted that the recent development is big positive for the company. It said this could have significant positive ramifications for Voda Idea and, by extension, for Indus Towers.
The ruling comes after the troubled carrier in September sought a waiver of penalty and interest on adjusted gross revenue demand of Rs 9,450 crore raised by the Department of Telecommunications, contending that a substantial portion of the demand pertains to the pre-FY17 period already settled by the apex court in 2020.
Meanwhile Citi added that, with a large lumpsum amount towards AGR dues coming up for payment by VI to the government in Mar 26, “we believe that relief from the government should be forthcoming well ahead of this deadline-le, in the coming weeks and months. We reiterate our ‘Buy’ rating on Indus with target price of Rs460 and maintain a ‘Buy’/High Risk rating on Voda Idea.
Citi also noted that AGR relief could trigger series of positive events including clarity on relief towards AGR dues from the government which has been a key challenge and major obstacle for VI in completing its Rs 250 billion planned bank funding.
The scrip fell as much as 2.41% to 9.73 apiece. It pared losses to trade 2.01% lower at Rs 9.97 apiece, as of 10:32 a.m. This compares to a 0.31% decline in the NSE Nifty 50 Index on Tuesday.
