Centre freezes ₹87,695-crore as Vodafone Idea AGR dues

Core Viewpoint - The Union Cabinet has approved a relief package for Vodafone Idea (Vi), freezing its adjusted gross revenue (AGR) dues at ₹87,695 crore and allowing repayment from FY32 to FY41, which aims to stabilize the company and maintain a competitive market [6]. Group 1: Relief Package Details - The relief package includes a reassessment of frozen AGR dues by the Department of Telecommunications (DoT) based on relevant guidelines and audit reports, with outcomes to be decided by a government-appointed committee [6]. - AGR dues for FY18 and FY19, finalized by the Supreme Court in 2020, will remain payable by Vi between FY26 and FY31 without changes [6]. Group 2: Market Reaction and Company Background - Vi's stock fell by 15% on the Bombay Stock Exchange (BSE) to ₹10.25, despite the approval of the relief package [6]. - Vi is a joint venture between India's Aditya Birla Group and the UK's Vodafone Group Plc, with the government as the largest shareholder, holding a 49% stake [2]. Group 3: Supreme Court Order and Future Steps - A favorable Supreme Court order allows the Centre to reconsider AGR demands for the period up to FY17 and reassess all AGR dues, including interest and penalties [3]. - ICICI Securities noted that the resolution of AGR demands appears probable following the Supreme Court order, and Vi is in discussions with DoT regarding the next steps [4]. Group 4: Financial Health and Investor Concerns - Nuvama highlighted that while the Supreme Court's order is a positive development, investor focus is on the delayed debt fund-raising, which is critical for capital expenditure (capex) [5]. - Metrics such as subscriber loss pace and average revenue per user (ARPU) are improving, but balance sheet repair is essential for Vi's survival [5].