Vodafone Idea Falls 20% from Intraday High: Here’s What Happened

Synopsis: Vodafone Idea stock hit its 52-week high before the cabinet’s decision on the Adjusted Gross Revenue dues of Rs 87,695 crore.  Following the announcement, the stock fell by 20%.

On Wednesday, the shares of this telecom company were in the spotlight as the Indian government made their announcement on a major AGR dues relief package for the company. The announcement was for Idea’s massive adjusted gross revenue (AGR) dues of around Rs 87,695 crore that are to be payable to the Indian government for past years of operations. 

With a market cap of Rs 1,16,577 Crore, and before the cabinet decision, Vodafone Idea Ltd saw its stock hit an intraday high of Rs 12.8, which was also the 52-week high of the stock and was 6 percent higher than the previous close of Rs 12.07. Post the cabinet decision, the stock crashed by 20 percent from its high to the day’s low of Rs 10.26.

The AGR liabilities in the context arose from licence fees, spectrum usage charges and other statutory levies calculated on a broad definition of AGR that telecom companies have long disputed. 

These large dues significantly strained Vodafone Idea’s finances, leaving the company struggling to meet annual instalment payments running into thousands of crores. This had sustained financial pressure that severely impacted cash flows and balance-sheet strength, which repeatedly warned the company on its long-term survival without depending on substantial government relief. 

The Government Decision

The Union Cabinet approved a major relief package for Vodafone Idea, by restructuring its massive Adjusted Gross Revenue (AGR) dues of Rs 87,695 crore. Today, the government also granted a five year moratorium on a crucial payment of nearly Rs 18,000 crore that was due by March 31, 2026, this eased the immediate cash-flow pressure. The Supreme Court stated that the company has a large public interest as it has 20 crore mobile customers and the government has a 49 percent stake in the company. 

Under the revised schedule, AGR dues for FY18 and FY19 will be paid over six years from FY26 to FY31 without additional charges or penalties. The total AGR liability has been frozen as of December 31, 2025 and rescheduled for payment over ten years from FY32 to FY41, with the Telecom Department set to reassess dues based on audit reports as the relief package comes while VIL continues to challenge the Department of Telecommunications’ (DoT) demand for an additional Rs 9,450 crore, while seeking waivers on interest and penalties for disputed components of the dues

Why did the stock crash even after relief?

Post the cabinet decision Vodafone Idea shares crashed nearly by 20 percent from the day’s high, despite the Cabinet approving relief on its Rs 87,695 crore AGR dues, as investors viewed the move as inadequate as there was a relief given only on the timing but no haircut was provided. 

The relief mainly involved freezing and deferring payments rather than waiving the dues, meaning the massive liability still remains on the balance sheet. Market participants had expected stronger measures such as a significant waiver or immediate reduction in near-term obligations. Additionally, Vodafone Idea still faces payment commitments for certain past dues, along with high debt levels and other ongoing operational challenges. 

This stock had rallied sharply ahead of the announcement on the relief expectations, but as the cabinet decision fell short of the market expectations there occurred profit booking, which had triggered a sharp sell-off.

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