Vodafone Idea Shares Hit 15% Lower Circuit as Cabinet Freezes ₹87,695 Crore AGR Dues for Five Years

Shares of Vodafone Idea Limited (Vi) witnessed sharp selling pressure on Wednesday, plunging nearly 15 percent to hit the lower circuit, despite a significant policy relief announced by the Union Cabinet. The stock decline came even as the government approved a decision to freeze the telecom operator’s adjusted gross revenue (AGR) dues amounting to ₹87,695 crore for a period of five years.

According to official disclosures, the Cabinet has approved a moratorium on Vodafone Idea’s AGR liabilities, deferring the payment of these statutory dues to a later period. Under the approved framework, the frozen AGR dues are proposed to be payable over a phased schedule beginning from FY32 and extending up to FY41. The move is aimed at providing near-term financial relief to the cash-strapped telecom operator, which has been facing persistent liquidity challenges.

Despite the relief measure, investor sentiment remained weak, leading to heavy selling in Vodafone Idea shares during the trading session. The stock touched the lower circuit limit, reflecting continued concerns over the company’s long-term financial stability and operational outlook. Market participants appeared cautious, indicating that while the moratorium offers temporary breathing space, it does not eliminate the company’s overall debt burden.

Vodafone Idea continues to carry substantial liabilities, including spectrum dues and AGR obligations accumulated over several years. Although the government’s decision reduces immediate cash outflows, the deferred payments remain a significant liability on the company’s balance sheet. Investors are closely monitoring whether the relief will translate into tangible improvements in cash flow, network investments, and competitive positioning.

The Cabinet’s decision is part of the government’s broader efforts to support the telecom sector and maintain a competitive market structure. Vodafone Idea plays a critical role in preserving a three-player telecom ecosystem in India, alongside larger peers Bharti Airtel and Reliance Jio. The government already holds a significant equity stake in the company following previous conversions of dues into equity.

Market experts note that the sharp decline in Vodafone Idea’s share price reflects deeper structural concerns rather than a reaction to the AGR relief alone. Issues such as declining subscriber base, limited capital expenditure capacity, and intense competition continue to weigh on investor confidence. The absence of clarity on fresh fundraising and long-term profitability has further added to market uncertainty.

The telecom operator has been under financial stress for several years following Supreme Court rulings on AGR dues, which significantly increased statutory liabilities for the sector. Since then, Vodafone Idea has reported recurring losses and has struggled to generate sufficient cash flows to fund network expansion and technology upgrades.

Going forward, investors are expected to track developments related to capital infusion plans, operational performance, and policy support measures. While the AGR dues freeze provides temporary relief, the sustainability of Vodafone Idea’s business model and its ability to compete effectively in India’s evolving telecom landscape remain key factors influencing market sentiment.

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