Fri Sep 20 10:52:50 UTC 2024: ## Vodafone Idea Shares Plunge After Supreme Court Rejects AGR Dues Relief

**New Delhi:** Shares of Vodafone Idea Ltd (VIL) plummeted by nearly 20% on the Dalal Street following a major legal setback. The Supreme Court on Thursday dismissed the company’s curative petition seeking a re-computation of Adjusted Gross Revenue (AGR) dues, leaving VIL with a hefty financial liability estimated at Rs 70,300 crore.

The court’s decision, which reaffirms a 2019 ruling, dealt a blow to Vodafone Idea’s hopes for relief from its massive financial burden stemming from the AGR dispute. The company, alongside other telecom operators, has been embroiled in a long-standing legal battle over the definition of AGR and the subsequent dues owed to the government.

The share price collapse sparked a wave of analysis from brokerages, with opinions varying on the future prospects of VIL. Nuvama Institutional Equities, while acknowledging the significant blow, suggested the 20% correction had already reflected the impact of the increased liability. The brokerage maintained a ‘Hold’ recommendation, advising investors to monitor key operational metrics such as subscriber losses, tariff hikes, and capital expenditure.

Nomura India took a more optimistic stance, upgrading its recommendation to ‘Buy’ with a target price of Rs 15. The brokerage believes the worst may be over for Vodafone Idea following the conclusion of the AGR issue and that government support will facilitate the company’s recovery. Nomura highlighted the positive outlook for the Indian telecom sector, citing anticipated tariff hikes and the potential for 5G monetization in the years to come.

UBS, meanwhile, provided a fair value estimate ranging from Rs 12 to Rs 24, noting that while the current share price is slightly below this range, risks associated with the company’s debt and financial stability remain. The brokerage also suggested options such as equity conversion or payment deferrals could be considered as Vodafone Idea strives to stabilize its financial position.

While the Supreme Court’s verdict presents a formidable challenge for VIL, the company’s ability to navigate this hurdle and capitalize on the broader positive trends in the Indian telecom market remains to be seen. Investors will be closely monitoring Vodafone Idea’s operational progress and its strategy for managing its financial obligations in the coming months.

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