Mumbai: Vodafone Idea<\/a> has opted to pay adjusted gross revenue (AGR) related dues amounting to Rs 8,837 crore for FY18 and FY19 in six equal annual instalments starting March 31, 2026. The Department of Telecommunications (DoT) recently offered the option in addition to its support package for the industry<\/a> announced last year.
Bharti Airtel<\/a>, which got a similar offer to defer its dues of about Rs3,000 crore for the period, is “studying the option and will respond by the deadline (June 30),” a person familiar with the matter said. This offer doesn’t apply to Reliance<\/a> Jio Infocomm, which doesn’t have pending dues for the period, said another person. Airtel and Jio didn’t comment.
The government had already allowed telcos to defer AGR dues<\/a> up to FY17 by four years. Vodafone Idea and Airtel have said they will defer those dues but only the former has agreed to convert the accrued interest<\/a> into equity<\/a>, which will see the government holding a 33% stake. Telcos pay licence fees and spectrum usage charges to the government on the basis of AGR.
In similar letters dated June 15, the DoT had asked all three private telcos to take a decision on deferring AGR payments within 15 days. “The said DoT letter also provides the company an option for equity conversion of interest dues upfront for these AGR related dues for which a period of 90 days has been provided from the date of the said DoT letter,” Vodafone Idea said in a notice to the stock exchanges late Wednesday night.![\"\"](\"\/\/www.iser-br.com\/Themes\/Release\/images\/responsive\/ettelecom-default.jpg\")
The loss-making company’s board, at its meeting on June 22, approved the “exercise of the option of deferment of the AGR related dues by a period of four years with immediate effect,” Vodafone Idea said in its notice. The telco hasn’t yet taken a call on converting the accrued interest into government equity. The new deferment option could mean the government can hold an additional 5-7% equity, apart from the currently expected 33%, in the telco, if Vodafone Idea opts for the conversion option, according to analysts.
‘Govt may end up holding up to 40%’
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“The final incremental stake will depend on the interest rate and the price at which it is converted to equity, but as a ballpark, the government stands to hold up to 40% stake in VIL,” one of them said.
Even at 33%, the government would be the largest single shareholder in the company. Promoters Vodafone Plc and the Aditya Birla Group would together hold a 50% stake.
The operator didn’t respond to queries about the possible extent of the government holding.
Vodafone Idea had earlier said that since the average price of the company’s shares at the relevant date of August 14, 2021, was below par value, the equity shares against the interest on AGR dues up to FY17 will be issued to the government at par value of Rs 10 per share, subject to final confirmation by the DoT.
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