Vodafone Idea seen getting decade-long relief; AGR dues of ₹87,000 crore may halve after review with payments in FY36-FY41

New Delhi: Vodafone Idea (Vi) has technically got a 10-year breather to pay more than 95% of its adjusted gross revenue (AGR) dues, officials said, referring to the pivotal relief package that would allow the struggling telco to recover financially. Vi stock, which had slumped on Wednesday, surged Thursday after some clarity emerged on potential benefit to the company.

Vodafone Idea's shares opened higher on BSE Sensex on Friday and were up nearly 2.5% in initial trade.


Officials told ET the government has frozen Vi's AGR dues at ₹87,695 crore as on December 31. A committee will be formed within three to four months to reassess dues, they said. "After the reassessment, ₹87,695 crore will go down substantially and whatever the new amount comes, it has to be paid by FY36 to FY41," said an official on the condition of anonymity, as the details are not public yet.

Also Read: Vodafone Idea receives Rs 638 crore GST penalty order; co says it will take legal action

When the company had approached the Supreme Court earlier, it wanted time until FY41 to pay the AGR dues. "The government has basically granted the company the necessary time to recover," said another official.

Until FY36, Vi will be paying around ₹114 crore annually for six years, starting the current fiscal until FY31 and ₹100 crore annually for another four years until FY35, said one of the officials cited above. As the company is technically paying some amount every year, there is no moratorium in the repayment schedule as such.

While there is a clean five-year moratorium for the frozen dues, which will be reassessed, the company has to pay AGR dues for FY18 and FY19. "The amount is ₹700-800 crore and has to be paid by FY31 as ₹114 crore in annual instalments," said a second official.

Shares of the telco closed at ₹11.62 apiece, up about 8% on the BSE on Thursday. The stock price hit a lower circuit a day earlier, when reports emerged about the relief package, which ruled out any waiver of dues. "However, after clarity today (Thursday) around the potential of the package, the stock has bounced back," said an analyst.

The Supreme Court order on AGR dues came in October 2019 and that order had accounted for dues until FY17.Another 5-yr Moratorium

Based on the order, the Department of Telecommunications (DoT) calculated dues for FY18 and FY19 too, and raised the demand for payment by telecom firms, including Vi and Bharti Airtel.

In September 2021, the government granted a four-year moratorium on AGR dues until FY19 to telcos, which included dues of the apex court order. The moratorium ends with this fiscal.

Now, Vi has got another five-year moratorium for AGR dues until FY17, and it has to pay for FY18 and FY19 in the manner outlined above.

But even from FY32, when repayment of the majority of AGR dues commences, Vofadone Idea won't be paying equal instalments until FY36, as it has to pay its spectrum dues. "The company has to pay Rs 100 crore from FY32 to FY36, and the remaining AGR dues have to be paid between FY36 and FY41," said the second official.

The first official cited said by FY36, the majority of Vi's spectrum auction dues would have been paid, and the company will be in a much better financial situation. Overall, the telco has to pay spectrum dues till FY44.

The government would have been the biggest loser if Vofadone Idea were to go bust, as it has the majority 49% stake in the telco. Aditya Birla Group and the UK's Vodafone Group Plc hold 9.50% and 16.07%, respectively.