Vodafone Idea continues to slide; shares slip below ₹10 after SC verdict on AGR dues

Last seen, shares of the telecom company were trading nearly 5% lower at ₹9.88 apiece on the NSE. The stock in the previous session tumbled around 20%. 

Adjusted gross revenue (AGR) is the basis for revenue sharing between telecom operators and the government. It determines the licensing and spectrum usage fees that operators must pay. The primary contention has been over the definition of AGR.

Telecom companies argued that it should only include core telecom revenues. While the DoT insisted it should encompass all revenue, including from non-telecom services.

In October 2019, the Supreme Court ruled in favour of the Department of Telecommunications (DoT), ending a 14-year legal battle and significantly increasing the financial liabilities of telecom operators. The judgment led to massive dues, with Airtel and Vodafone Idea owing more than ₹90,000 crore combined.

The Supreme Court, however, ruled that the dues must be paid over a 10-year period, with 10% upfront by March 2021 and the remainder to be paid annually until 2031.

In April this year, the debt-saddled company launched the country's biggest follow-on public offer (FPO). The issue size was ₹18,000 crore. 

The fundraise was launched with the objective of giving the ailing telco the firepower to improve its positioning in the Indian telecom market, where it trails larger rivals such as Reliance Jio and Bharti Airtel by a wide margin.

The funds were also expected to help Vodafone Idea shore up finances for the much-delayed 5G rollout, strengthening 4G services, and payment of vendor dues.