Vodafone Idea clarifies on report of no further govt relief

Vodafone Idea clarifies on report of no further govt relief

Vodafone Idea Ltd. (Vodafone Idea) has seen a significant drop in its stock price following the Ministry of Communications' clarification that no additional relief measures are under consideration for the debt-laden telecom operator. The stock fell 12.2% to Rs 6.59 on the BSE, hitting the day’s low, and was trading 7.43% lower at Rs 6.85 at 12:24 am [1].

Minister of State for Communications Chandra S Pemmasani clarified that the government is not considering any additional relief package for Vodafone Idea, stating that "Whatever we wanted to do has already been done" [1]. This clarification comes after the government converted nearly Rs 53,000 crore of Vodafone Idea’s dues into equity in 2021, making the Centre the single-largest shareholder with a 49% stake [1].

The government's stance has left investors concerned about Vodafone Idea's ability to manage its Rs 75,000 crore AGR liability and post-moratorium repayments. The company is expected to begin repaying this liability in six equal instalments after the moratorium ends on March 31, 2026 [2].

Despite the setback, Vodafone Idea is in advanced negotiations to secure Rs 5,000 crore in debt financing to fortify its capital structure and aid its turnaround strategy [1]. The funding will be channelled through Vodafone Idea Telecom Infrastructure Limited, a subsidiary managing the company's telecom and renewable energy assets. JM Financial, an investment bank, has been appointed to advise on the transaction, which is anticipated to be finalised within a fortnight [1].

The stock exchange sought clarification from Vodafone Idea on August 26, and the reply is awaited [1]. The company's stock has declined nearly 55% from its 52-week high of Rs 16.55 apiece [1].

Vodafone Idea's AGR liability as of the end of the June 2025 quarter stood at approximately Rs 75,000 crore. The telco, along with peers like Bharti Airtel, BSNL, and MTNL, had challenged the DoT’s AGR definition in the past, but the Supreme Court's October 2019 verdict upheld the department's interpretation and mandated full payment of dues [2].

The minister also addressed queries on spectrum allocation for satellite communication (satcom) services being considered by global and domestic players, including Starlink and Eutelsat OneWeb, confirming that discussions on pricing are ongoing [2]. Satellite firms will be required to host Indian user data domestically and cannot use foreign gateways for service delivery in India [2].

Vodafone Idea shares closed 4.7% higher at Rs 7.40 on the BSE on Monday [2].

References:
[1] https://www.businesstoday.in/markets/stocks/story/vodafone-idea-share-reacts-as-govt-rules-out-fresh-relief-what-investors-need-to-know-491114-2025-08-26
[2] https://economictimes.indiatimes.com/markets/stocks/news/vodafone-idea-shares-in-focus-after-centre-rules-out-further-agr-relief/articleshow/123516200.cms