Thu Sep 19 12:08:43 UTC 2024: ## Vodafone Idea Stock Plunges 15% After Supreme Court Rejects AGR Dues Recalculation

**New Delhi, India** – The stock price of Vodafone Idea Limited (Vi) plummeted by 15% on Tuesday following the Supreme Court’s dismissal of a curative petition seeking a recalculation of adjusted gross revenue (AGR) dues. The telecom giant, along with Bharti Airtel, had argued that the Department of Telecommunications (DoT) had incorrectly calculated their dues.

The petition, filed by Vi, aimed to rectify alleged mathematical and typographical errors in the AGR demand, reduce the penalty to 50% of the shortfall, and lower the penalty’s interest rate to 2% above the State Bank of India’s prime lending rate. However, the court rejected these requests, leaving Vi facing a significant financial burden.

Following the verdict, analysts at IIFL Securities expressed concerns about the cash flow situation for Vi, anticipating further challenges without court relief. The dismissal of the curative petition is seen as a potential positive for Bharti Airtel, suggesting potential market share gains.

The Supreme Court’s decision casts a shadow over Vi’s debt-raising plans, crucial for continuing its capital expenditure (capex) program. Goldman Sachs, in a recent report, reaffirmed its bearish rating on Vi, predicting a continued decline in market share due to the company’s limited capex compared to competitors.

The brokerage expects Vi to lose an additional 300 basis points of market share over the next three to four years, citing a direct correlation between capex and revenue market share.

Despite the bleak outlook, Goldman Sachs identified a best-case scenario where Vi’s AGR dues are slashed by 65%, tariffs consistently rise, and no immediate government repayments are required. In this optimistic scenario, the implied value per share could reach Rs 19.

The stock price of Indus Tower, which provides telecom infrastructure services to Vi, also dropped by 10% on Tuesday, reflecting the market’s sentiment towards the telecom sector.

Vi’s share price has already eroded over 32% in 2024, significantly underperforming the benchmark Nifty index, which has gained nearly 17% year-to-date. The company is facing a mounting debt burden and intense competition from Reliance Jio and Bharti Airtel, making its future uncertain.

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