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Mint
3 days ago
- Business
- Mint
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.
Time of India
4 days ago
- Business
- Time of India
Vodafone Idea in talks with government on AGR relief: CEO Akshaya Moondra
NEW DELHI: Vodafone Idea CEO Akshaya Moondra, during an investor call following the release of the company's Q4 and FY25 financial results, confirmed that the company is actively engaged in discussions with the government regarding the long-standing Adjusted Gross Revenue (AGR) issue. He noted that there are no existing restrictions that prevent the government from extending support. "As far as the government relief is concerned, I think we are engaged with the government... what the government will do, I cannot comment on their behalf. But definitely post the judgment, we continue with our engagement with the government to find a solution to the AGR matter," Moondra said, as quoted by news agency PTI. Highlighting broader challenges in the telecom sector, Moondra pointed out that India continues to have the lowest Average Revenue Per User (ARPU) globally, while industry returns remain below the cost of capital. He called on the urgent need for a revised pricing framework, stating that higher data consumption should be charged proportionally more- a departure from the current pricing model. Moondra also referred to the 2021 telecom reforms, emphasizing that despite Public Interest Litigations (PILs) in the Supreme Court, the court upheld that policy decisions fall within the government's domain. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 3BHK Transformation Possible for ₹4.5 Lakh? HomeLane Get Quote Undo He suggested this precedent indicates the government retains the authority to implement relief measures for the sector. The CEO further clarified the government's position regarding its 49 per cent stake in Vodafone Idea, acquired through a recent dues-to-equity conversion. "There is no intent to take up any board seat, the shareholding of the government is a consequence of the government providing support in reducing dues," he stated. This clarification gains importance as Vodafone Idea seeks a waiver of approximately Rs 30,000 crore in AGR dues. The company is grappling with statutory liabilities and a declining subscriber base. According to TRAI data, VI lost 6.47 lakh mobile users in April, bringing its total to 20.47 crore subscribers. Following the Supreme Court's dismissal of its AGR relief plea, Vodafone Idea informed the Department of Telecommunications that its operations beyond FY26 would be unsustainable without government intervention, a key concern in ongoing discussions with banks regarding future funding. Also read: 'No more conversion of equity in Voda-Idea' Financially, the company reported a reduced net loss of Rs 7,166.1 crore for the March quarter. Its revenue for Q4FY25 rose 3.8 per cent year-on-year to Rs 11,013.5 crore. For the full fiscal year, losses narrowed to Rs 27,383.4 crore from Rs 31,238.4 crore in FY24. To strengthen its financial position, Vodafone Idea's board has approved a fundraising plan of up to Rs 20,000 crore, subject to regulatory and shareholder approvals. The capital infusion may be raised 'either by way of further public offer or private placement or through any other permissible mode as may be considered appropriate,' the company said. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
