Vodafone Idea share price came under heavy selling pressure today (October 28). The shares of the telecom operator slipped over 10% in intraday trade today, after the Supreme Court’s written order on the telecom company’s adjusted gross revenue (AGR) plea failed to offer broad-based relief.
The stock hit a day’s low of Rs 8.21 on the BSE.
Why Vodafone Idea shares are under pressure
The fall in Vodafone Idea shares came after more clarity on the Supreme Court emerged. As per the written order from SC, the relief granted earlier this week is only in relation to its additional AGR demand of Rs 9,450 crore.
The Apex court noted that its consideration was based on the “peculiar facts and circumstances” of Vodafone Idea’s case and does not include the company’s earlier plea that sought waiver of penalty and interest on past dues.
This means that the reassessment will only apply to the new demand, not the entire AGR liability that has long weighed on the company’s finances. The judgment effectively narrows the scope of relief investors had been expecting earlier in the week.
What sparks fresh concerns now?
Limited relief has sparked a fresh concerns among investor.
However, market participants had initially cheered the Supreme Court’s decision on Monday (October 27).
They hoped that this decision would pave the way for a wider review of AGR dues across telecom players. But, the detailed order suggests only a partial relief. This has dampened the sentiment.
Here’s what Supreme Court order said
The Apex Court, in its written order, said that Vodafone Idea’s plea was limited only to the additional AGR demand raised for the period up to FY17.
This means that the court’s decision will cover only that specific portion of the company’s dues. It will not apply to Vodafone Idea’s entire AGR liability.
Furthermore, the Supreme Court also made it clear that the ruling applies exclusively to Vodafone Idea and was given after considering the unique circumstances of the company’s case.
Hence, other telecom operators cannot claim the same relief based on this judgement.