Vodafone Idea’s AGR case pushed to late October

Vodafone Idea Limited (VIL), India’s third-largest telecom operator, continues to struggle with the burden of outstanding adjusted gross revenue (AGR) dues. Despite filing a petition with the Supreme Court (SC) challenging the central government’s increased AGR demands, the matter remains unresolved.

On Monday, the Supreme Court once again deferred the AGR hearing. Following the announcement, Vodafone Idea’s stock closed 3.87% lower at Rs 8.69 on the stock exchanges. The Court has made its stance clear: it expects the government and the telecom operator to come to a resolution over the AGR issue. The next hearing is now scheduled for 27 October 2025.

Vodafone Idea has previously made several appeals to the Supreme Court seeking relief from the government-imposed AGR dues. However, the Court has consistently sided with the government. In earlier rulings, it stated it would not permit a reassessment of the dues and ordered the telecom sector to pay the amounts calculated by the Department of Telecommunications (DoT).

In a major move, the government converted a portion of Vodafone Idea’s dues into equity, becoming the largest shareholder with nearly a 50% stake. This gave the company some financial relief but came with conditions. The government has clarified it does not intend to operate Vodafone Idea as a state-run enterprise and will not acquire any additional shares. It also intends to stay out of the company’s daily operations and decision-making.

Vodafone Idea is expected to begin making deferred AGR payments in instalments from 2026. However, the size of these instalments exceeds the company’s current financial capacity. Funds recently raised by Vi have been directed towards capital expenditure (capex), primarily aimed at upgrading and expanding its network infrastructure. The telco’s strategy has been to raise capital for investment, while relying on revenue generation to service its debts and cover operational costs.