Shares of Vodafone Idea jumped as much as 9.12% ahead of Supreme Court hearing on a matter of adjusted gross revenue (AGR).
At 11.40am, Vodafone was trading at ₹9.44 up 6.31% from its previous close, while the benchmark index, Sensex gained 0.66% to 37265.94.
The Supreme Court will hear the Centre’s plea in telecom AGR case. The Centre has sought the apex court’s approval for a 20-year window for payment of AGR-related dues by companies like Airtel, Vodafone and Reliance, which comes to ₹1.47 trillion at an 8% interest rate, to avoid possible bankruptcy if its earlier order is implemented. This is part of a bailout package proposed by the Centre.
Vodafone Idea paid additional ₹1,000 crore to department of telecommunications(DoT) on Friday as part of its AGR dues. The company had earlier deposited ₹6,854 crore in 3 tranches. The company has, thus, paid an aggregate amount of ₹7,854 crore towards AGR dues, according to a filing on the exchange.
In an October ruling, the Supreme Court had upheld DoT’s definition of AGR and asked mobile operators to pay levies based on that definition, along with interest on the principal amount and penalty. In its submission before the apex court seeking relief in the payment tenure for telecom companies, DoT had pegged Vodafone Idea’s dues at ₹58,254 crore.
The Supreme Court on 24 October 2019 ruled in favour of the government on the AGR issue, with grave revenue implications to the tune of over ₹92,000 crore for the ailing telecom sector. AGR is the basis on which DoT calculates levies payable by operators. Telecom operators are liable to pay around 3-5% and 8% of the AGR as spectrum usage charges and licence fees, respectively, to DoT.
Vodafone Idea recorded a consolidated net loss of ₹11,643.50 crore in Q4 March 2020, higher than net loss of ₹4,881.90 crore in Q4 March 2019. Consolidated revenue from operations fell 0.17% to ₹11,754.20 crore in Q4 FY20 over ₹11,775 crore in Q4 FY19.