Post by : Badri Ariffin

Shares of Vodafone Idea jumped almost 10% in intraday trade on Tuesday after the Supreme Court authorised the Central government to review the reassessment of the telecom operator’s adjusted gross revenue (AGR) liabilities — a long-running financial burden for the company.

The bench said the AGR matter falls within the policy domain of the Union government and indicated there is "no impediment" to the Centre taking an appropriate decision, a development that quickly improved market sentiment around the debt-laden carrier.

The decision offers some breathing room for Vodafone Idea, which has struggled under heavy dues and stiff competition. A reassessment or reduction of AGR obligations could materially ease the company’s cash flow pressures and support its recovery prospects.

With the government holding roughly a 50% stake in Vodafone Idea, any easing of liabilities would bolster the operator’s balance sheet and free up resources for network upgrades and more competitive pricing — measures seen as crucial to closing the gap with rivals Reliance Jio and Bharti Airtel.

The AGR dispute dates back nearly two decades and centres on what revenue items should be included for licence fees and spectrum charges. After the Supreme Court’s 2019 ruling that total revenue — including non-core income — must be counted, the Department of Telecommunications pursued sizeable demands. Vodafone Idea has contested the DoT’s claim, saying the additional ₹5,606 crore sought for the period up to FY2016–17 was incorrectly calculated.

Previously, the operator’s requests for reassessment had been delayed amid repeated adjournments. The court’s latest remarks create a new opportunity for government review, a prospect investors view as a potential turning point in Vodafone Idea’s long road to financial stability.

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