Vodafone Idea shares gained on Monday, October 27, ahead of the Supreme Court hearing on the company’s plea to quash the Department of Telecommunications’ (DoT) additional adjusted gross revenue (AGR) demands for the period up to FY2016–17.
The stock opened marginally higher at ₹9.63 on the BSE, compared to its previous close of ₹9.62, and climbed as much as 1.87% to touch an intraday high of ₹9.80 per share. At around 10:30 AM, Vodafone Idea shares were trading 0.62% higher at ₹9.68 apiece.
A Supreme Court bench comprising Chief Justice B.R. Gavai and Justices K. Vinod Chandran and Vipul M. Pancholi is scheduled to hear Vodafone Idea’s petition today, as the apex court resumes work after the Diwali break.
Background of the Case
The telecom operator has challenged the DoT’s additional AGR demand of ₹5,606 crore for the period up to FY2016–17. In its plea, Vodafone Idea has requested the court to direct the DoT to “re-assess and reconcile all AGR dues” in accordance with the Deduction Verification Guidelines issued on February 3, 2020.
The case was last heard on October 13, when the Supreme Court deferred the proceedings to October 27. The hearing has been postponed several times previously, on requests from both Vodafone Idea and Solicitor General Tushar Mehta, who represents the central government.
Government’s Stake and Previous Rulings
The Centre, which holds nearly 50% equity in Vodafone Idea, has emphasized its interest in the company’s survival. Mehta had earlier told the court that discussions were ongoing to reach an amicable solution.
In 2021, the Supreme Court had dismissed telecom operators’ review petitions seeking rectification of alleged errors in AGR calculations. The court had earlier, in its September 2020 order, allowed a 10-year payment timeline for clearing AGR dues amounting to ₹93,520 crore, directing firms to pay 10% upfront by March 31, 2021, with the balance payable in annual installments until March 31, 2031.
The AGR issue dates back to the Supreme Court’s landmark judgment in October 2019, which upheld the DoT’s definition of AGR to include both telecom and non-telecom income. However, in 2021, the government revised the rules to exclude non-telecom revenue from AGR calculations, providing relief to the financially stressed telecom sector.
As the Supreme Court takes up the matter today, market participants are closely watching the outcome, which could have significant implications for Vodafone Idea’s financial stability and investor sentiment.