AGR dues: Vodafone Idea to pay ₹124 crore a year over next 6 years

Vodafone Idea on Friday confirmed in an exchange filing that its adjusted gross revenue (AGR) have indeed been frozen by the government and the firm will begin paying a maximum of ₹124 crore a year over next six years beginning March this year to March 2031.

The telco will also pay ₹100 crore annually, from March 2032 to March 2035.

It comes over a week after reports suggested that the Centre has offered a relief to the debt-ridden telecom operator and has frozen the payment amount at ₹87,695 crore and timelines of the AGR dues, including principal, interest and interest on penalty, for the period from FY 2006-07 to FY 2018-19.

The operator had on December 31 denied receiving any communication from the government on the moratorium.

The remaining AGR dues, after a reassessment, will be paid in equal installments annually over the next six years, that is March 2036 to March 2041, the telco said in an exchange filing.

“A committee is to be constituted by DoT to reassess the AGR dues, whose decision shall be final. Thereafter, the reassessed amount is to be repaid between March 2036 to March 2041 in equal annual installments,” the telco said in a statement.

Following the disclosure, Vodafone Idea’s stock rose by 3.3 per cent on Friday morning, trading at ₹11.88 on BSE.

"Such a decisive government action with possible upside (but zero downside) from reassessment would enable VI to raise bank funding that’s necessary for carrying out survival capex. Favourable SC verdict already enabled VI to raise ₹3,300 crore NCDs recently," said Vivekanand Subbaraman, research analyst at Ambit Capital.

The communication from the department of telecommunications (DoT) to the telecom operator comes on the back of government’s decision to offer a fresh relief package to the carrier, by freezing the AGR dues at ₹87,695 crore and permitting the financially-stressed telco to repay the amount over a 10-year period starting 2031-32. The government is a 49 per cent stakeholder in the carrier.

This follows a recent Supreme Court verdict, allowing the government to reassess and reconcile Vodafone Idea’s AGR dues up to the financial year 2016-17.

The telecom operator, which was formed by the merger of the UK’s Vodafone Group and Aditya Birla Group’s Idea Cellular in 2018, had petitioned the Supreme Court for a recalculation of dues and waiver of penalties and interest in view of its financial distress.