It said that post the adverse SC order in the long-standing AGR case, Airtel and the combined entity of Vodafone Idea are liable to pay Rs 21,700 crore and Rs 28,300 crore, respectively. These liabilities pertain only to underpaid licence fee and associated penalty and interest.
Related demand on underpaid spectrum usage charges is also quite likely, which could be 60-70 per cent of the licence fee related demand, the brokerage house said in a report.
Stating that the judgment has far reaching implications, it said aggregate demand from 15 operators (10 of whom have exited the industry) stood at a hefty 92,641 crore.
"The amounts are material for both Bharti Airtel and Vodafone Idea and places the latter specifically in a very tricky spot, given the massive stress it is already under," the report said.
Both Airtel and Vodafone Idea, in their respective press releases post the SC judgment, have appealed to the government to review the impact of the verdict on the industry and find ways to mitigate the financial burden on the sector.
"We wouldn't be too hopeful of a material relief. Vodafone Idea has also indicated that it could look at filing a review application if there are any technical or procedural grounds to do so. Our understanding, on the basis of discussions with legal experts, is that the case for a review application to be accepted is quite weak," the report said.
Assuming that no relief comes through, the outstanding liability of 28,300 crore (and another potential large demand for past SUC underpayment) would make the already-stressed situation even tougher for Vodafone Idea.
"The company may need to resort to another round of large equity raise to fund these payouts. However, this may not be easy, given that the amounts we are talking about are a multiple of the company's current market capitalisation. Bharti's balance sheet is relatively better and while the payouts will increase the leverage ratios, we believe the situation is far more manageable for Bharti," the report said.
On October 24, the Supreme Court ruled in favour of the Department of Telecommunications (DOT) in a long-standing dispute on the definition of adjusted gross revenue (AGR).
Operators pay licence fee and spectrum usage charges (SUC) on AGR and the dispute pertained to inclusion/exclusion of receipts from non-licensed activities (items like treasury income, dividend, capital gains, scrap sales, forex income, etc.) and certain other items (bad debt recovery, trade/consumer discounts, rental income on infra sharing).
The SC ruled that the DOT's claims on the definition of AGR as well as applicability of interest, penalty and interest on penalty are both valid and that the operators are liable to pay 100 per cent of the demand that DoT has raised.
( With inputs from IANS )