Vodafone Idea Shares Jump as Potential Moratorium on AGR Dues Looms

Shares of Vodafone Idea experienced a surge, climbing as high as 3.3% to reach ₹12.03 on the National Stock Exchange (NSE). This increase is attributed to reports suggesting the government is considering granting the financially strained telecom operator a moratorium of four to five years on its adjusted gross revenue (AGR) dues, which total over ₹83,000 crore.

According to The Economic Times, this potential moratorium would be interest-free, providing immediate financial relief to Vodafone Idea. The report further indicates that after the moratorium period, the company would be required to settle the outstanding arrears in six installments. That said, the reality is a bit more complicated. the amount due is expected to be significantly reduced, potentially by half, following a reassessment of the liabilities.

**Understanding Moratoriums**

A moratorium is a temporary suspension of a financial obligation, typically authorized by a governing body such as a government, court, or lender. In business, it often refers to a grace period where payments are not required, providing a company with crucial breathing room without being considered in default.

**Recent Developments**

Earlier in December, Union Telecom Minister Jyotiraditya Scindia stated that the Department of Telecommunications (DoT) is awaiting a formal request from Vodafone Idea. Speaking to CNBC-TV18, Scindia noted that the government would evaluate Vodafone Idea’s proposal and then make a recommendation. He also emphasized that the ministry is carefully considering the legal limitations set by the Supreme Court, ensuring any actions remain within the court's established boundaries. Scindia suggested that the government's assessment and recommendations could be finalized before the end of the year, with details of the relief package potentially announced around the same time.

In November 2023, the Supreme Court provided Vodafone Idea with a significant reprieve by allowing the Centre to re-evaluate and reconcile the telecom company's pending AGR dues. The court clarified that this review would not be restricted to AGR dues from the 2016-17 financial year.

On October 27, 2023, a Supreme Court bench stated that Vodafone Idea’s petition appeared to limit its claim to additional AGR demands raised for the period up to the 2016-17 financial year. That said, the reality is a bit more complicated. Vodafone Idea's counsel requested a correction to the October 27 order, clarifying that the company sought relief against both additional AGR dues and the reassessment of all AGR dues. The Supreme Court then clarified that the telecom firm had indeed requested relief on both fronts.

As of March 2025, the additional AGR dues for Vodafone Idea are approximately ₹9,450 crore, with the total AGR demand exceeding ₹83,500 crore. This clarification from the Supreme Court potentially paves the way for the Centre to grant relief to Vodafone Idea on all AGR dues.

Previously, the Supreme Court had permitted the Centre to reconsider and reconcile the telecom company's pending adjusted gross revenue dues of ₹5,606 crore for the 2016-17 period. (With inputs from PTI)