Vodafone Idea share price falls 2% after telco resumes relief talks with govt on AGR dues
Vodafone Idea share price fell over 2 per cent in Tuesday's trading session after the telecom company said that it is actively working with the central government to obtain relief for its longstanding Adjusted Gross Revenue (AGR) liabilities.
However, at 9:20 am, the Vodafone Idea stock recovered losses by climbing intraday high to ₹ 7.02 apiece on June 3.
The company, which is facing challenges, is in talks with banks to obtain debt financing for its long-term growth, said CEO Akshaya Moondra. She added that banks will seek clear information about the telco's outstanding payments to the government before approving any loans. However, Moondra noted that this requirement is not hindering the progress of the discussions.
Vodafone Idea CEO Akshaya Moondra mentioned that the company is still in talks with the central government to reach a practical resolution on the AGR issue. He emphasized that the government should have full freedom to provide relief, especially since this is a policy matter beyond the scope of judicial intervention.
Moondra also pointed out the financial pressures the company faces, highlighting India's low Average Revenue Per User (ARPU) and the unsustainable pricing of data services as key obstacles. He called for a pricing model where heavy data users bear a proportionally higher cost, stressing that the telecom sector's current returns fall short of the cost of capital.
This update comes after the Supreme Court recently rejected the company's request for relief, dealing a major setback to the heavily indebted telecom operator.
The telecom company is struggling with AGR liabilities close to ₹ 30,000 crore and a declining market share. TRAI data shows that Vodafone Idea's subscriber count dropped by 6.47 lakh in April, bringing the total to 20.47 crore.
Ahead of the Supreme Court's decision, the telecom company had sent an urgent appeal to the telecom department, cautioning that without timely government support, it might not sustain operations beyond FY26.
Although the company reduced its net loss to ₹ 7,166.1 crore in Q4 FY25, Vodafone Idea continues to depend heavily on external aid. Recently, its board approved a plan to raise up to ₹ 20,000 crore, pending shareholder and regulatory clearances.
According to Riyank Arora, Technical Analyst at Mehta Equities Ltd, Vodafone Idea is showing signs of stability above its support at ₹ 6.80. As long as the stock holds this level, a short-term upward move toward the target of ₹ 7.55 looks possible.
'A breakout above ₹ 7.00 with volume can add momentum to the move. However, if it breaks below ₹ 6.80, weakness could set in, and the stock may drift lower. Traders can consider buying with a stop-loss at ₹ 6.80, aiming for ₹ 7.55 in the near term. The trend remains cautiously positive above support,' Arora said.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
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