The Supreme Court’s ruling on adjusted gross revenue (AGR) has dealt Vodafone Idea Ltd a massive blow, although the troubled telco is still expected to survive. At least that’s what the stock market’s verdict on the court’s ruling appears to be. Vodafone Idea shares are down about 15% compared to where they were just ahead of the ruling, but they are about three times higher compared to lows of ₹3 per share a few months ago.
While the telco may just survive for now, its journey will get even more painful.
The Supreme Court has asked telcos to pay 10% of the AGR dues upfront and has set a 10-year payment timeline for rest of the amount. While details on the upfront payment and interest rate applicable are awaited, it’s clear that Vodafone Idea will need a healthy dose of equity infusion as well as tariff hikes to continue as a going concern. And over and above this, it will need some help from the government in terms of a further deferment of spectrum liabilities, say analysts.