Vodafone Idea shares surge 14% after Supreme Court's AGR clarification
What's the story
Vodafone Idea's shares surged by a whopping 14% on Monday after the Supreme Court clarified its stance on the adjusted gross revenue (AGR) dues. The clarification followed a hearing on October 27, where it was uncertain if the court order only pertained to Vodafone Idea's petition for additional AGR dues of nearly ₹9,500 crore or all pending AGR dues worth nearly ₹80,000 crore.
Relief possibility
Supreme Court's clarification on AGR dues
The Supreme Court today clarified that the government is free to consider relief on both additional and reassessment of the AGR dues. The court had noted that considering the peculiar facts such as the Centre's stake in Vodafone Idea, and its impact on 20 crore consumers, it sees no impediment in the Centre reconsidering this issue and taking an appropriate decision.
Market response
Impact on telecom stocks
Following the Supreme Court's clarification, Vodafone Idea's shares witnessed a sharp increase of nearly 14% to ₹9.9. The news also positively impacted other telecom companies such as Bharti Airtel and Bharti Hexacom whose shares rose by 1% and recovered from their day's lows respectively. Indus Towers, a potential beneficiary of any relief for Vodafone Idea, also saw its shares jump by 4%.