Vodafone Idea Shares Jump Amid Talk of 4–5 Year AGR Dues Relief as Experts Advise Caution

The shares of Vodafone Idea (Vi)  continue to surge as amid reports that  the government may offer an interest-free moratorium of four to five years on over Rs 83,000-crore of the telecom company's pending adjusted gross revenue (AGR) dues. The stock rose more than 3 percent to hit a fresh 52-week high on December 15. Vodafone Idea has repeatedly flagged its inability to service the AGR dues and sought government support. The Centre is the company’s largest shareholder, holding a 48.99 per cent stake after converting part of Vi’s past dues into equity. Last month, the Supreme Court also allowed the government to frame a special relief package for the telco covering its entire AGR liabilities. Resolution of the AGR issue could pave the way for Vodafone Idea to raise fresh capital, including its planned Rs 25,000 crore fundraising. A successful equity infusion would dilute the government’s stake and could also give the Centre the option to convert additional dues into equity, further easing the company’s financial stress.

Currently, the Aditya Birla Group and the UK’s Vodafone Group Plc hold 9.50 per cent and 16.07 per cent stakes in the company, respectively.It was earlier reported that New York-based private equity firm Tillman Global Holdings is in talks to invest $4–6 billion (Rs 35,000–52,800 crore) in Vodafone Idea and potentially take operational control. The proposal is contingent on AGR relief, after which other investors may also consider participating. Commenting on Vodafone Idea shares, Kunal Parar of Choice Equity Broking told ET NOW Swadesh that the recent moves in Vodafone Idea shares have been largely driven by news flow rather than fundamentals. He noted that the news reports surrounding AGR relief have definitely placed the counter in spotlight and helped the stock gain momentum over the past few weeks.

Parar, however, cautioned that Vodafone Idea's fundamentals remain weak. "Fundamentally, nothing is left in Vodafone Idea," he said and recommended exiting positions "if Vodafone Idea shares show the levels of Rs 14-15"."I would suggest exit your positions in Vodafone Idea around Rs 14-15," Kunal said.