Indian telecom service provider Vodafone Idea (VIL) has sought additional relief from the government as it faces mounting financial pressure to repay its adjusted gross revenue (AGR) and spectrum dues, NDTV Profit reported.
Also Read: Govt Drops AGR Dues Waiver Plan, Deems Relief to Private Firms Unjust: Report
In a letter to Telecom Secretary Neeraj Mittal on March 11, VIL requested a further conversion of its dues into equity. If approved, the government's stake in the company could rise from 22.6 percent to 49 percent, sources said, as per the report.
Mounting Dues and Financial Woes
Vodafone Idea currently owes Rs 36,950 crore in AGR and spectrum dues and must immediately pay Rs 13,089 crore in the coming weeks. The company has stated it lacks the ability to make these payments and is seeking relief under the 2021 Telecom Relief Package, the report quoted sources as saying.
The request comes amid reports that the government has rejected any waiver on AGR dues. A proposed reduction in AGR liabilities could have offered Vodafone Idea Rs 52,000 crore in relief, cutting its total debt by 25 percent.
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Legal Setback and Prior Government Support
In July 2024, VIL had approached the Supreme Court for a review of its AGR dues calculation but faced a setback in September 2024 when the court dismissed its plea.
This is not the first time Vodafone Idea has sought government support. In February 2023, the government converted Rs 16,133 crore of dues into equity, initially holding 33.44 percent of the company. However, after Vodafone Idea’s Rs 18,000 crore follow-on public offer (FPO) in April 2023, the government’s stake was diluted to 22.6 percent.
Uncertain Future for VIL
Vodafone Idea remains in a precarious position. While addressing a post earnings call in February, Vodafone Idea's Chief Executive Officer Akshaya Moondra had expressed confidence that the government will step in, given its stake in the company.
"The government's intent is clear that it will provide support if need arises. Moreover, it is cognisant that support will be required on this issue. The government is the biggest stakeholder in this process; therefore, we are confident that a solution will be found," Moondra had said.
Also Read: Vodafone Idea Reports Rs 6,609 Crore Loss, Plans 5G Rollout in Mumbai by March 2025
This latest request from the government adds to a long history of government support that Vodafone Idea and its Indian promoter Aditya Birla group has sought.
With the telecom company struggling for survival, all eyes are now on the government's decision—whether it will provide further relief or let market forces take their course.
