Vodafone Idea shares plunge 9% after govt rules out further AGR relief

New Delhi: Shares of telecom company Vodafone Idea fell sharply on Tuesday, declining by over 9 percent in intra-day trading. The stock dropped by 9.19 percent and has now fallen more than 16 percent since the start of the year.

The decline followed comments from Minister of State for Communications, Pemmasani Chandra Sekhar, who stated that the government has no plans to provide any further relief to the company regarding its adjusted gross revenue (AGR) dues. The minister reiterated, as reported by multiple media outlets, that the government has already taken all feasible steps, including converting a significant portion of Vodafone Idea's debt into equity. He added that there are currently no discussions underway, nor any intentions to introduce additional measures.

Any future relief, he said, would be a collective decision by the Union Cabinet, involving the Prime Minister’s Office (PMO), the Ministry of Finance, Telecom Minister Jyotiraditya Scindia, and the Department of Telecommunications (DoT).

The announcement also had a knock-on effect on Indus Towers, with shares falling 3.58 per cent in early trade to ₹342.05. Although flat year-to-date, Indus Towers’ stock has declined over 11 per cent in the past month. Investors are believed to have offloaded positions following the clarification that no further government support is currently planned in relation to AGR dues.

Last week, reports had suggested that the DoT had submitted proposals to the PMO, including a two-year moratorium on AGR payments, reduced annual instalments, and waivers on penalties and interest. When asked whether the PMO had received any such proposal, the minister responded: “not that we know of.”

Commenting on the future of Vodafone Idea, the minister said: “That is not up to me to decide… All the companies are continuously reaching out for various reasons, they will also be continuously reaching. But at this time, the discussion — there is nothing that we have planned.”

Vodafone Idea had earlier appealed to the DoT to treat the principal amount of ₹17,213 crore (as calculated up to FY2019) as final and to waive interest and penalties on the outstanding AGR dues.

Speaking during an investor call earlier this month, Vodafone Idea CEO Akshaya Moondra said the company’s focus remains on business investment. “Whatever capital is available to the company, the focus is not on engaging with the government regarding its shareholding. The priority is to utilise any funding and cash flows for investments that will yield the best returns for the business,” he said.

The company is currently in discussions with banks for funding, but lenders have reportedly requested clarity on the AGR issue before proceeding. Moondra noted during the June quarter earnings call that the company has urged the government to resolve the matter before the March 2026 deadline, so that banks may move forward with funding arrangements.

In terms of financial performance, Vodafone Idea reported a widening net loss of ₹6,608 crore in the first quarter of FY26 (April–June 2025), compared with a net loss of ₹6,432 crore during the same period last year. However, revenue from operations rose 5 per cent year-on-year, reaching ₹11,023 crore, up from ₹10,508 crore in Q1 FY25, according to the company's filing with the stock exchange.

IANS