Vodafone Idea Plunge 15% After Supreme Court Maintained AGR Verdict

Shares of Vodafone Idea nosedived 15% on Thursday following the Supreme Court’s ruling on adjusted gross revenue (AGR) dues. The telecom giant’s plea was dismissed, which could lead to a massive impact on its market standing.

What Happened: The Supreme Court rejected the curative petition of Vodafone Idea and Bhart Airtel, which had argued that there were errors in the calculation of dues to the telecom department, reported CNBC-TV18. The top court had asked the telecoms to pay the dues over a 10-year period in a September 2020 order.

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Vodafone had sought a correction in calculation errors in the AGR demand, limiting penalties to 50% of the shortfall and revising the interest rates on the penalty to 2% above State Bank of India’s prime lending rate.

CNBC-TV18 said citing IIFL Securities that Vodafone Idea’s cash flow situation will become challenging without the relief while Bharti Airtel has a slightly positive outlook due to market share gains.

The research firm added that it will keep an eye on whether the struggling telecom will go through its debt-raising plans after the unfavourable ruling as fundraising is critical for the company to continue its capital expenditures.

Price Action: Shares of Vodafone Idea fell 14.88% to ₹10.98 on Thursday before clawing back some gains.

On the other hand, shares of Bharti Airtel raced 3.43% to an all-time high of ₹1,706.35 after the news broke.

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