 "Vodafone Idea to get five-year lifeline on AGR dues of ₹87.7K crore")
The government has decided to offer a fresh relief package to Vodafone Idea by freezing its adjusted gross revenue (AGR) dues at ₹87,695 crore and permitting the financially-stressed telco to repay the amount over a 10-year period starting 2031-32, according to sources. This implies a five-year moratorium for Vi, which was scheduled to begin paying its AGR dues to the government in March 2026.
This follows a recent Supreme Court verdict, allowing the government to reassess and reconcile Vodafone Idea’s AGR dues up to the financial year 2016-17. The telecom operator, which was formed by the merger of UK’s Vodafone Group and Aditya Birla Group’s Idea Cellular in 2018, had petitioned the apex court for a recalculation of dues and waiver of penalties and interest in view of its financial distress.
Even as a Union Cabinet meeting, held on Wednesday, is learnt to have taken up the Vodafone Idea AGR moratorium proposal, the government, which has a 49 per cent stake in the telco through a prior conversion of Vi’s dues, has not confirmed the development.
While Vi share price rose significantly Wednesday morning after media reports that the Union Cabinet would clear a relief package to the telco, the stocks closed the day 11.53 per cent lower following indications that a five-year moratorium was on offer instead of a waiver of dues.
In its statement to the exchanges, Vi said it had not “received any communication from the government” regarding the proposed amnesty. “As and when there is any development which requires disclosure, we will do the needful,” Vi said.
The dues, frozen as of December 31, 2025, will be reassessed by the Department of Telecommunications (DoT) under the Deduction Verification Guidelines (DVG), and a government-appointed committee will decide the outcome of the reassessment, the sources said. The DVG, first introduced around March 2020, is an internal standard operating procedure followed by all DoT field offices to verify deduction claims from telecom operators' gross revenue (GR) to arrive at AGR.
The AGR dues for the company for the financial year 2017-18 and 2018-19 will have to be paid by Vi between 2025-26 and 2030-31, sources said.
Commenting on the moratorium, a senior government official said: “This will protect the interest of the 49 per cent stake that the government holds in Vi, while also allowing payment of dues in a timely manner. With this timeline, Vi should be able to revive itself and find investors.”
With this relief, the central government is of the opinion that the telco should either be able to raise funds for its turnaround or bring in a strategic investor, an official said.
Coinciding with the government lifeline, the telco has reached a revised agreement with its promoter group, UK-based Vodafone Group, to recover up to ₹5,386 crore in liabilities linked to the 2017 merger of Vodafone India and Idea Cellular. Confirming this development, Vi said these liabilities relate to any future legal, tax, or regulatory dues arising after the merger.
Of this amount, the Vodafone Group and promoters will pay the Indian company Rs 2,307 crore in cash over the next 12 months. Apart from this, Vodafone Group shareholders will also set aside 3.28 billion Vodafone Idea shares for five years, which can be sold at the company’s direction. The funds raised from this sale will also go to Vodafone Idea. At current market prices, the value of these shares is pegged at roughly Rs 3,500 crore.
The Supreme Court order allowing the government to recalculate Vi’s AGR dues saw some twists and turns. On October 27, a three-judge bench of Chief Justice of India Justice BR Gavai and Justices K Vinod Chandran and Vipul M Pancholi had said that the central government was free to reconsider Vodafone Idea’s plea to set aside the additional demand of ₹9,450 crore raised by the Department of Telecommunications. But, a week later, the court modified its order and stated that the central government was free to take a call on the entire AGR dues of the beleaguered company, instead of just the additional demand of ₹9,450 crore, of which ₹5,606 crore pertains to 2016-17.
The case dates back to 2020, when the Supreme Court had upheld DoT’s calculation of the telco’s AGR dues up to 2016-17, ruling out any further recalculation. Vodafone Idea’s liabilities were pegged at Rs 58,254 crore then, a figure that has since risen to ₹ 83,400 crore.