Vi shares hit 52-week high as Centre weighs AGR relief
What's the story
Vodafone Idea (Vi) shares surged by 3.2% on the Bombay Stock Exchange (BSE), hitting a new 52-week high of ₹12.02 earlier today. The spike comes amid reports that the Indian government is likely to provide an interest-free moratorium of four to five years on Vi's adjusted gross revenue (AGR) dues, which exceed ₹83,000 crore.
Relief package
Government's potential measures to ease Vi's financial burden
The proposed relief package could ease the financial burden on the struggling telecom company and improve its liquidity position in the short term. The government is also considering a review of the outstanding liabilities, which could potentially cut down the final payable amount by nearly half. After the moratorium period, Vi would have to pay off these dues in six installments at a significantly lower amount.
Payment plan
Committee to finalize payment terms for Vi
A committee headed by a secretary-level official will finalize the payment terms, with a formal decision awaiting Cabinet approval. Under the current arrangement, Vi is supposed to pay over ₹18,000 crore in March 2026 as the first installment of AGR dues. However, this new relief package is likely to replace the earlier interest-accruing plan with an interest-free structure and cap total liability.
Legal battle
Supreme Court's ruling and Vi's quest for relief
In 2019, the Supreme Court ruled that telecom operators must pay statutory dues based on their full adjusted gross revenue, including non-telecom income. Unable to meet these obligations, Vodafone Idea sought government relief. The proposed relief package is exclusive to Vi and won't apply to other operators like Bharti Airtel. This comes after a recent SC order allowing the government to formulate a special relief package for Vi.
Future prospects
Successful implementation could pave way for capital raise
The successful implementation of this relief package could also enable Vi to go ahead with its proposed ₹25,000 crore capital raise. Reports also suggest that Tillman Global Holdings, a New York-based private equity firm, is looking to invest $4-6 billion (₹35,000-₹52,800 crore) in Vodafone Idea if the relief package is finalized. The proposal includes operational control and other investors are said to be waiting for the outcome of this process before making their commitments.