Shares of Vodafone Idea have declined as much as 15% on Thursday after the Supreme Court upheld the Adjusted Gross Revenue ruling against the telecom companies and upheld the quantum of the AGR demand.
Vodafone Idea’s AGR dues currently stand at ₹70,300 crore.
In its decision, the Supreme Court stated that it had reviewed the curative petitions and related materials and that the telecom corporations had not proven any case. The Supreme Court rejected the petitions as a result. The telecom providers had alleged that there were arithmetic problems in the AGR dues computation.
A good ruling from the Supreme Court might have given Vodafone Idea an upside of ₹5 per share, but in the wake of the unfavourable decision, the company’s cash flow situation will get more challenging, according to Balaji Subramaniam, Vice President of IIFL Securities.
In addition, Subramaniam told CNBC-TV18 that considering Vodafone Idea’s lack of improvement, he believes Bharti Airtel may acquire more market share.
According to the vice president of IIFL Securities for Vodafone Idea, the company will now be closely watching to see if it can proceed with its plan to raise debt in light of the unfavourable Supreme Court decision. This debt fund raise is essential for the company to continue with its capital expenditure plans.
As per IIFL Securities, Bharti Airtel presently holds AGR dues around ₹36,000 crore.
At ₹10.96, Vodafone Idea shares are presently engaged in a 15% downward circuit. The shares has dropped below ₹11, the price of its follow-on public offer.
Released on September 19, 2024 at 11:41 AM IST
