New Delhi: The Supreme Court on Thursday rejected telcos’ plea for review of AGR dues. The Supreme Court in its ruling rejected the curative plea filed by Bharti Airtel and Vodafone Idea. The telcos alleged major errors in how AGR dues were calculated by the department of telecom.
The judgment is expected to put a spanner in the works for Vodafone Idea’s plans to raise funds, CNBCTV18 reported, citing an analyst at IIFL Securities. However, Bharti Airtel may receive some gains from prospects of an increase in market share if Vodafone Idea’s plans are stuck, according to the analyst cited above.
What are AGR dues
AGR dues stand for adjusted gross revenues dues towards the payment of licence fees. This is part fo a revenue sharing mechanism between the government and the telcos. The telcos pay the government a licensing fee and spectrum usage fee. These are determined as part of the company’s adjusted gross revenue.
The telcos have disputed the calculation of these AGR dues — while the government insists on including revenues from non-telecom services in the calculation, telcos insist upon only including core revenue towards determining the dues, NDTV Profit reported.
The curative plea was filed in response to a 2019 judgment in which the Supreme Court ruled that non-core revenues should be included in the calculation of AGR dues. Bharti Airtel and Vodafone Idea owed Rs 90,000 crore to the government when the 2019 judgement was passed by the apex court.
How telcos’ stocks responded
Vodafone Idea’s stock value slipped 15 per cent on Thursday following the judgment while Indus Towers’ share price was down 10 per cent. Bharti Airtel’s share price rose 1.23 per cent after the judgment. Vodafone Idea’s shares stood at Rs 10.98 per share, while Bharti Airtel’s share price stood at Rs 1,672.55 apiece at 1:45 pm. Indus Towers’ share price stood at Rs 387.85 apiece at the time of writing.
The Supreme Court on Thursday rejected telcos’ plea for review of AGR dues. Know what it means and why the judgment is likely to hurt some telcos. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
