Jan 20, 2025
4 min read
Vodafone Idea (VI) shares witnessed a remarkable surge, locking in a 15% upper circuit at ₹14.47, driven by reports of potential AGR dues relief from the government. This development marks a significant turning point for the telecom giant's market performance.
The surge in Vodafone Idea's share price comes amid reports that the central government is contemplating a significant partial waiver of AGR dues. This potential relief could reduce VI's liabilities by approximately ₹52,000 crore, while Bharti Airtel could see a reduction of ₹38,000 crore in their dues.
The share price movement reflects several crucial factors:
AGR Relief Timing: Expected announcement during Union Budget 2025 on February 1
Current Dues: VI's AGR obligations stand at approximately ₹80,000 crore
Relief Components: Potential waiver of penalty and interest portions
Market Impact: Stock trading 36% above FPO price of ₹11
IIFL Securities projects a fair value of ₹10 per share post-AGR relief, highlighting several key factors:
Tariff Expectations: 15% hike likely in late 2025
Cash Flow Impact: Annual savings of ₹11,500 crore possible
Capital Expenditure: ₹50,000-55,000 crore program feasible by FY27
Among 22 analysts covering Vodafone Idea:
13 analysts: Recommend 'Sell'
5 analysts: Suggest 'Hold'
4 analysts: Maintain 'Buy' rating
"The potential AGR relief could be a game-changer for Vodafone Idea, potentially transforming its debt profile and competitive position in the Indian telecom sector."
Telecom Sector Analyst