By Admin 
Vodafone Idea Shares: Shares of telecom company Vodafone Idea jumped by 9 percent today. There is a reason for this rise in the company’s shares. Actually, today the petition related to AGR dues of the company was heard in the Supreme Court. In this, the company had demanded cancellation of the Additional Adjusted Gross Revenue (AGR) demand imposed by the Department of Telecommunications (DoT).
Since this matter falls within the scope of government policy, the Supreme Court has allowed the government to reconsider the company’s petition. This decision of the court is no less than a ray of hope for the company which is burdened with debt. This may help Vodafone Idea to maintain its operations and attract new investment.
What is the matter?
This debt-ridden company had challenged the Department of Telecommunications (DoT)’s new demand of Rs 5,606 crore for the financial year 2016–17. The company had argued that any new demand related to AGR is not justified because the liabilities related to it have already been decided in the decision of the Supreme Court in 2019. AGR i.e. Adjusted Gross Revenue is that part of the earnings on which companies pay license fees and other charges to the government.
Earlier the fees were paid only on the network, but in 2019 other parts like bank interest or income from sale of property were also added to AGR. Due to this, huge dues were accumulated on the companies and there was a tussle between the government and the telecom companies. By relaxing the rules in 2021, non-telecom income was excluded, thereby reducing the burden on companies.
AGR outstanding burden on companies
Earlier in 2020, the court had asked the telecom companies to pay their dues AGR, which totaled Rs 93,520 crore. Giving a time of ten years, the court ordered that 10 percent of the outstanding amount has to be paid by March 31, 2021 and the remaining amount has to be paid from April 1, 2021 to March 31, 2031. The court also made it clear that the outstanding amount will not be re-evaluated. On this, Vodafone Idea had appealed for re-review of the AGR calculation of 2016-17, saying it was wrong, for which the court has given permission today.
Shares jumped due to court decision
The effect of this decision of the Supreme Court was visible on the shares of Vodafone Idea. In early trade, the stock opened with a decline of 2 percent. At the same time, with the court’s decision, it saw a rise of about 9 percent. Within no time, it rose by about 11.4 percent on NSE to reach its 52-week high of Rs 10.52.
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