Shares of Vodafone Idea crashed by 15% after the government’s much awaited AGR relief announcement fell below expectations. The stock which had touched a 52-week high today morning is now trading at Rs. 10.25 after touching 12.29. The telecom company was granted relief after the Cabinet granted a five-year interest-free moratorium on its over Rs 87,000 crore plus pending statutory dues linked to adjusted gross revenue. According to a NDTV Profit report, as part of the package, the government will freeze Vodafone Idea's AGR dues without any interest until FY32. The approval was granted after a Cabinet meeting on Wednesday, serving as a much-needed relief for a cash-strapped Vodafone Idea.
It must be noted that Cabinet's relief for Vodafone Idea does not include any waiver on its over Rs 87,000 AGR dues, meaning the company would still have to pay the pending dues but now has until FY32 before the debt starts accruing interest. This comes against the backdrop of the street expecting an AGR waiver of at least 50%, which could have had major positive implications on Vodafone Idea's long-term prospects. But with Cabinet offering no relief on overall AGR debt, the street remains sceptical about Vodafone Idea's ability to generate enough free cash flow by FY32 to pay back the entirety of the dues.
For the unversed, Indian government officially increased its stake in the financially struggling telecom operator Vodafone Idea (Vi) to 48.99 per cent from 22.60 percent. This increase followed the conversion of ₹36,950 crore of the company’s spectrum payment dues into equity shares. This move by the government occurred on Monday, April 21, 2025. This is not the first instance of government intervention to ease Vi's financial woes. In February 2023, the government had also converted Vi’s debt of about ₹16,130 crore into equity. This previous conversion comprised interest arising from the deferment of adjusted gross revenue (AGR) and spectrum installments. So far this year, Vodafone Idea's stock has gained an impressive 52%, according to BSE data.