Vodafone Idea share price crashes 39% on Supreme Court's AGR verdict, falling subscriber base

Vodafone Idea share price crashed in early trade today after Supreme Court rejected review petitions by various telecom companies challenging the apex court's judgement in the Adjusted Gross Revenue (AGR) case. Share price of Bharti Airtel, which is also affected by the SC's AGR order, managed to hit its fresh 52-week high after data from telecom regulator TRAI revealed the firm added 16 lakh subscribers in November. Vodafone Idea lost maximum 3.6 crore wireless subscribers in November which led to its stock falling up to 39.30% to Rs 3.66 against previous close of Rs 6.03 on BSE. There were only sellers, no buyers for the Vodafone Idea stock in early trade.

Airtel 'disappointed' with SC verdict on AGR, mulls curative petition

The stock opened with a loss of 10% at Rs 5.43 on BSE today. On the other hand, share price of Sunil Mittal-led Bharti Airtel rose 5.19% to hit a fresh 52-week high of Rs 498.65 against previous close of Rs 474.05 on BSE. The large cap stock has gained 5% in the last two days.  Airtel share price has gained 61.33% during the last one year. On Thursday, the Supreme Court dismissed review petitions challenging the apex court's  judgement in the AGR case. 

Bharti Airtel and Vodafone Idea have to pay pending AGR dues to the Department of Telecommunications by January 23. Telecom companies, who are looking at a payout of Rs 93,000 crore, had sought relief earlier this month.

With the payment deadline looming close, telecom players have expressed their inability to pay the pending AGR dues. Vodafone Idea Chairman Kumar Mangalam Birla has said the telco would shut shop without the government's help. Bharti Airtel Chairman Sunil Mittal has also asked the government to be sympathetic towards telcos.

The reason mentioned by both companies is heavy losses incurred by them since the entry of Reliance Jio. Vodafone Idea is struggling with losses for the past three years that ballooned to Rs 50,922 crore in the September quarter of FY20 - the highest quarterly loss in India's corporate history - as it had to make significant provisions for the AGR dues. Airtel reported record losses to the tune of Rs 22,830 crore in the same quarter.

Meanwhile, Airtel said yesterday it was disappointed and was planning to file a curative petition against the verdict.

The company said issues raised by the telecom companies against the earlier verdict of the apex court were "genuine". "While respecting the Hon'ble Supreme Court's decision, we would like to express our disappointment as we believe the long-standing disputes raised regarding the AGR definition were bonafide and genuine," a company spokesperson said.

By Aseem Thapliyal