Vodafone Idea Limited’s stock experienced a significant jump on Monday, rising by 15% to reach an intraday high of ₹10.48 compared to its previous closing price of ₹9.12.
The sudden increase in share value is linked to reports that the central government is considering a partial waiver of Adjusted Gross Revenue (AGR) dues.
This relief could potentially reduce liabilities for Vodafone Idea by ₹52,000 crore and Bharti Airtel by ₹38,000 crore. The announcement is expected as early as February 1 during the Union Budget 2025.
Details of AGR Relief
The government is exploring the possibility of waiving the penalty and interest portions of AGR dues.
This follows the telecom companies’ appeal for relief after the Supreme Court dismissed a petition for recalculating AGR demands in September 2024.
Vodafone Idea’s AGR dues are estimated at ₹80,000 crore, while Bharti Airtel’s stand at around ₹42,000 crore. If implemented, this move could significantly ease the financial burden on both companies.
Target Price and Future Outlook
According to IIFL Securities, Vodafone Idea’s stock may rally further to ₹10 per share if the AGR relief is granted. The brokerage also anticipates another 15% tariff hike by the end of 2025.
If the relief materializes, it could improve Vodafone Idea’s ability to raise funds and help meet its planned ₹50,000–55,000 crore capital expenditure by FY27.
Additionally, the annual cash payment burden could reduce by ₹11,500 crore for Vodafone Idea and ₹8,400 crore for Bharti Airtel.
Analysts’ Recommendations
IIFL Securities remains optimistic about Bharti Airtel, Indus Towers, and Hexacom, and has highlighted the likelihood of the government converting part of Vodafone Idea’s dues into equity.
Among 22 analysts covering Vodafone Idea, 13 recommend selling the stock, five suggest holding, and four advise buying. Notably, Vodafone Idea’s stock has already climbed 25% in just 14 trading sessions this year.
