According to the latest Reuters report, India has granted Vodafone Idea a five-year moratorium on its AGR dues. According to Reuters, the relief comes months after the Supreme Court said the government could consider the company’s request for relief on its AGR liabilities.
According to Reuters, the moratorium will be applicable for a five-year period, offering near-term cash flow relief to the debt-laden operator, which has repeatedly warned that its survival hinges on government support.
FinancialExpress.com hasn’t been able to verify the news independently. Vodafone Idea hasn’t responded to queries sent by Financialexpress.com at the time of publishing. We will update the story as soon as we get an update.
Payment schedule and reassessment of dues
According to PTI, the frozen AGR dues of Rs 87,695 crore will be rescheduled for payment over FY32 to FY41. AGR liabilities related to FY18 and FY19, however, will remain payable over the next five years.
The Department of Telecommunications (DoT) is expected to reassess the frozen dues based on audit reports. There is, however, no clarity yet on whether interest, penalties and interest on penalties, which form the bulk of the AGR dues, will be fully or partially waived.
Supreme Court backdrop
The latest decision follows a recent Supreme Court order allowing the government to comprehensively reassess and reconcile Vodafone Idea’s dues, including interest and penalties, up to FY17.
In September, Vodafone Idea had sought a waiver of penalty and interest on an AGR demand of Rs 9,450 crore raised by the DoT, arguing that a large portion related to the pre-FY17 period had already been settled by the apex court in 2020. Of this amount, Rs 2,774 crore pertained to post-merger liabilities, while Rs 5,675 crore related to pre-merger dues of the Vodafone Group, as per Moneycontrol.
Govt is largest shareholder
The government became Vodafone Idea’s largest shareholder in March after converting dues worth Rs 36,950 crore into equity, raising its stake to nearly 49%. Earlier, in 2023, the Centre had acquired a 33% stake in the company in lieu of statutory dues exceeding Rs 16,000 crore.
Financial stress remains
Vodafone Idea continues to grapple with a heavy dues burden, with AGR liabilities estimated at around Rs 83,400 crore and annual payments of nearly Rs 18,000 crore scheduled from March 2025.
The company has repeatedly cautioned that banks remain reluctant to lend, given its stressed balance sheet. Vodafone Idea employs more than 18,000 people and serves close to 198 million subscribers.
The steps are intended to protect the government’s interests as a roughly 49% stakeholder, ensure orderly recovery of spectrum and AGR dues, maintain competition in the telecom market, and safeguard the interests of nearly 20 crore Vodafone Idea users, PTI added.
Market reaction
Vodafone Idea’s shares have been volatile. After hitting a 52-week low of Rs 6.12 in August, the stock more than doubled over four months to touch a fresh 52-week high of Rs 12.36 earlier this week, as per Moneycontrol. Vodafone Idea’s share price has jumped nearly 3.56% in intraday trade. The stock is up over 25.75% in the last 1 month. Furthermore, it is up 55.86% in 2025 so far.