- By Aditya Pratap Singh
- Fri, 16 May 2025 04:10 PM (IST)
- Source:JND
Vodafone Idea Ltd (Vi), a struggling telecom operator, has petitioned the Supreme Court for relief from its enormous Adjusted Gross Revenue (AGR) debt, stating that without immediate financial assistance, it might not be able to continue operating past FY 2025–2026.Vi claimed in its May 13 petition that it is experiencing an existential crisis even though it recently received a second government lifeline. The business cited worries about its liabilities, particularly a crucial Rs 18,000 crore AGR installment that is due in March 2026, as the reason it was unable to obtain new bank funding.
Without bank funding, the Petitioner company will not be able to operate beyond FY 2025–26, as it does not have the ability to pay AGR instalment of Rs 18,000 crore as per DoT demands, the plea stated.
AGR Dues- The Main Obstacle
A 2019 Supreme Court decision requiring telecom companies to include non-core income when calculating revenue payable to the government is the root cause of the AGR issue. The total AGR-related liabilities of Vodafone Idea are more than Rs 58,000 crore. The business has consistently looked for financial and regulatory clarity in an effort to draw in strategic investors and raise much-needed funds.
Government Assistance- Relief and Equity Conversion Initiatives
The government converted Vi's interest payments of Rs 16,133 crore into equity in February 2023 as part of a larger telecom relief package, gaining a 33.1% stake and becoming the largest shareholder. Currently, promoters Vodafone Group and Aditya Birla Group own about 17% and 18% of the market, respectively. Nonetheless, the government has declared that it will not be involved in the management of the company and will continue to be a "public shareholder."
Financial Difficulties Continue
Vi continues to report large losses and a declining subscriber base, falling behind rivals Reliance Jio and Bharti Airtel in spite of the equity conversion and previous relief measures like interest moratoriums and deferred payments.
A possible shutdown or significant disruption in Vodafone Idea's business operations might put pressure on banks that have exposure to the telco, lessen market competition, and result in job losses. The Supreme Court's ruling on Vi's petition, according to industry analysts, will be critical to both the company's continued existence and the general stability of India's telecom market.
