Telecom Stocks: Vodafone Idea and Bharti Airtel Face Setbacks as Supreme Court Dismisses AGR Petition
Vodafone Idea's shares witnessed a sharp decline of nearly 15% by 12:45 PM, dropping to ₹11.41 per share on NSE. Indus Towers also faced a significant drop, with its share price falling by over 14%.
Vodafone Share Price : On Thursday, September 19, 2024, telecom companies, including debt-ridden Vodafone Idea and Bharti Airtel, faced a significant blow when the Supreme Court of India rejected petitions seeking corrections to alleged errors in their Adjusted Gross Revenue (AGR) dues. Following this decision, the stock prices of several telecom companies, particularly Vodafone Idea, dropped sharply.
Vodafone Idea and Indus Towers Stock Plummet
Vodafone Idea’s shares witnessed a sharp decline of nearly 15% by 12:45 PM, dropping to ₹11.41 per share on NSE. Indus Towers also faced a significant drop, with its share price falling by over 14%. However, Bharti Airtel shares gained 2%, trading at ₹1,701 per share on NSE.
Recently, Indus Towers’ board approved a share buyback of 5.67 crore shares, increasing Bharti Airtel’s stake in the company to over 50%, making Indus Towers a subsidiary of Bharti Airtel.
Supreme Court Rejects Corrective Petition
The Supreme Court dismissed the corrective petitions of telecom companies, including Vodafone Idea and Bharti Airtel, which sought to rectify alleged errors in the AGR dues. A bench led by Chief Justice DY Chandrachud, along with Justice Sanjiv Khanna and Justice BR Gavai, also rejected the companies’ plea to list these petitions for hearing in open court.
What is a Corrective Petition?
A corrective petition is the final legal recourse in the Supreme Court. It is typically reviewed in a closed setting unless a clear case is made for reconsideration. Once dismissed, there is no further appeal possible in the Supreme Court.
The bench pronounced the order on August 30, and the decision was made public on Thursday. As soon as the order became public, the shares of telecom companies involved in the petition began to drop sharply in the stock market.
Previous Rejections of AGR Petitions
This is not the first time telecom companies have faced such a setback. On October 9, 2023, the Supreme Court had considered the arguments of some telecom companies regarding the AGR dues issue but did not grant relief. Earlier, in July 2021, the court rejected petitions seeking rectification of alleged errors in the ₹1 lakh crore demand for AGR dues.
This latest decision further underscores the Supreme Court’s firm stance on AGR dues, adding financial pressure to already debt-laden companies like Vodafone Idea.
