Vodafone Idea Shares Surge 9% on Hopes of AGR Dues Relief from Govt

Shares of debt-ridden telecom firm Vodafone Idea (Vi) rose as much as 9% on Tuesday as investors cheered the report of possible relief on its massive Adjusted Gross Revenue (AGR) dues to the government. The Aditya Birla Group and Vodafone Plc joint venture owes about ₹84,000 crore in AGR dues to the Department of Telecommunications (DoT) for its past spectrum purchases.

According to a Bloomberg report on Monday, the government is considering a one-time settlement of the dues ahead of UK Prime Minister Keir Starmer’s visit to New Delhi. The move is reportedly part of Prime Minister Narendra Modi’s plan to strengthen economic ties with the UK.

Citing sources, the report said officials drafting the relief framework want to ensure that any deal does not trigger legal challenges from other telecom operators who also owe AGR dues. Bharti Airtel and Tata Teleservices also have AGR dues running into thousands of crores.

The proposed relief could include a waiver of interest and penalties, followed by a concession on the principal amount for Vodafone Idea Ltd.

The company is already fighting a legal battle with the government over the issue in the Supreme Court. It approached the court last month, claiming the DoT had demanded an additional ₹9,450 crore in AGR dues. Vodafone Idea argued that this new demand had already been “crystallised” in earlier Supreme Court orders.

Of the ₹9,450 crore fresh demand, ₹2,774 crore is against the Idea Group and the post-merger Vodafone Idea, while ₹6,675 crore targets Vodafone Group for the pre-merger period. The company stated that ₹5,606 crore of this demand relates to periods up to FY17, which were already settled by the 2020 order.

The Centre told the court it is seeking a final solution to the matter. A hearing scheduled for Monday was deferred to October 13.

Notably, Vodafone Plc wrote down its investment in Vi in 2020 following a Supreme Court ruling in the AGR case. The verdict ended a decade-long dispute between the DoT and telecom operators over the definition of AGR. The department had included non-spectrum revenues in its AGR calculation — a move opposed by telecom companies — but the apex court upheld the DoT’s interpretation, imposing thousands of crores in liabilities on the operators.

Vodafone Idea was the most affected, as it was already losing market share in its battle with the newly formed Reliance Jio.

Since, the government has announced two relief packages for the company, including converting part of its dues into 49% equity. However, earlier this year, Vi told the Supreme Court that it would not be able to continue operations beyond FY26 without further relief.

On Tuesday, Vi shares ended the trading session with an 8.5% gain at ₹9.19.