Vodafone Idea Limited’s stock surged by 15% on Monday, reaching an intraday high of ₹10.48, compared to its previous closing price of ₹9.12.
This sharp rise is linked to reports suggesting the central government may partially waive Adjusted Gross Revenue (AGR) dues.
If the waiver is approved, Vodafone Idea’s liabilities could be reduced by ₹52,000 crore, and Bharti Airtel’s by ₹38,000 crore.
The announcement is anticipated during the Union Budget 2025, scheduled for February 1.
Details of AGR Relief
The government is considering waiving the penalty and interest components of AGR dues.
This move follows the telecom sector’s plea for relief after the Supreme Court rejected their petition to recalculate AGR demands in September 2024.
Vodafone Idea currently owes around ₹80,000 crore in AGR dues, while Bharti Airtel owes approximately ₹42,000 crore.
If the relief is implemented, it could significantly ease the financial pressures on both companies.
Positive Outlook for Vodafone Idea
IIFL Securities predicts Vodafone Idea’s stock may rise further to ₹10 per share if the AGR relief is granted. Additionally, the brokerage expects another 15% tariff hike by the end of 2025.
The potential relief could improve Vodafone Idea’s ability to secure funds, aiding its planned capital expenditure of ₹50,000–55,000 crore by FY27.
It could also reduce the annual cash payment burden by ₹11,500 crore for Vodafone Idea and ₹8,400 crore for Bharti Airtel.
Analysts’ Perspectives
IIFL Securities remains optimistic about Bharti Airtel, Indus Towers, and Hexacom, and suggests the government might convert part of Vodafone Idea’s dues into equity.
Out of 22 analysts covering Vodafone Idea, 13 recommend selling the stock, five suggest holding, and four advise buying.
Vodafone Idea’s stock has already risen 25% in just 14 trading sessions this year, reflecting growing investor interest.
