AGR Dues: Vodafone Idea’s Legal Battle Hits a Wall in Supreme Court

In a tough blow to Vodafone Idea, the Supreme Court has dismissed the company’s plea to waive the interest on its massive Adjusted Gross Revenue (AGR) dues. The court, led by Justices J.B. Pardiwala and R. Mahadevan, rejected the request, calling it “misconceived.” The ruling also affects Bharti Airtel, which had made a similar appeal for relief from the AGR-related liabilities.

What’s the AGR Dues Issue About?

Vodafone Idea, already struggling with huge debts, had hoped that the court would give them some breathing room, asking for relief from over Rs 45,000 crore in AGR-related liabilities. Despite the government stepping in to convert part of these dues (about Rs 39,000 crore) into equity, the company still faces an overwhelming Rs 1.19 lakh crore in spectrum and AGR dues.

Airtel, too, has been hit hard by the AGR issue. Together with its subsidiary Bharti Hexacom, it sought a waiver for Rs 34,745 crore in dues, but the court remained firm in its rejection.

The Impact on Vodafone Idea and Bharti Airtel

This court decision raises serious questions about the future of Vodafone Idea, which has been struggling for some time now. With the dismissal of their petition, the company has very few options left. The pressure is mounting as it faces one of the largest debt burdens in the industry. After the verdict, Vodafone Idea’s stock took a significant hit, dropping more than 9%, with shares trading at just Rs 6.70.

This ruling is the latest chapter in a long legal saga. Back in 2019 and 2020, the Supreme Court had already made its position clear on the AGR dues, rejecting requests for more favorable terms. The court also dismissed Vodafone Idea’s curative petition in 2024. Despite all efforts to challenge the AGR calculations and repayment schedule, it seems there’s no escape from these liabilities for the telecom giants.

So, What’s Next for the Telecom Industry?

The future of Vodafone Idea now hangs in the balance. This latest setback could push the company closer to the edge, and with the mounting debt, its survival remains uncertain. As for Bharti Airtel, while it remains in a stronger position, the AGR issue could still put pressure on them.

The telecom industry in India has been through a lot in recent years, and this court ruling serves as a reminder of just how much is at stake. It’s clear that without some kind of relief, the future of these telecom giants – and their millions of customers – could be in jeopardy.