Supreme Court gives telcos 10 yrs to pay AGR dues
Published On: Tuesday, September 1, 2020 | By: Team KnowMyStock
Today (1st September 2020) the Supreme Court allowed the companies to clear their adjusted gross revenue (AGR) dues in ten years and begin by making an upfront payment of 10 percent of the total dues. Telecom companies have to give an undertaking for paying the AGR dues as per the SC order. The payment timeline begins from April 1, 2021, and the first installment needs to be paid before March 31, 2021. In a stern message to the telecom companies, SC said that any default in payment would invite interest, penalty, and contempt of court. According to the DoT’s calculations, Bharti Airtel owes the exchequer Rs 43,780 crore, of which the company has paid Rs 18,004 crore. Vodafone Idea has paid Rs 7,854 crore of its Rs 50,399 crore dues. Tata Teleservices has paid about Rs 4,197 crore and the balance is about Rs 12,601 crore.
However,the experts feel that the tenure could pose a grave challenge for the debt-ridden Vodafone Idea Ltd, which is grappling with financial woes and has time and again pleaded with the SC for a longer payment tenure to be able to sustain in the cut-throat telecom space.
“It is very disappointing, especially when the government had agreed to grant a 20-year payment schedule. It will put Vodafone Idea in a very difficult situation as its valuation will reduce, the customers will move away. It will also push the sector to a ‘duopoly’, independent analyst Hemant Joshi said.
Shares of Vodafone Idea were down 15 per cent on the BSE, after the verdict and those of Bharti Airtel were up 5.1 per cent.
Brokerage firm Motilal Oswal is of the view that the verdict is positive for Bharti and RIL, as liability of Aircel (Rs 14,000 crore) and Videocon (Rs 1300 crore) will not fall on Bharti and RCom (Rs 31,000 crore) will not fall on RJio who have acquired their spectrum.
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