The order does not reference the telecom company’s previous plea seeking a waiver of penalty interest and interest on penalty dues, suggesting that the Supreme Court’s consideration was confined only to the reassessment of the additional amount.
After this report was first published in the morning, the exchanges sought clarification from Vodafone Idea.
Centre and Vodafone Idea Should Seek Clarification: IIFL Finance
Reiterating the same, brokerage firm IIFL said the Supreme Court’s written order results in ambiguity on whether the flexibility permitted to the Centre is applicable only to Vodafone Idea’s additional AGR demand of ₹9,450 crore or on the original AGR liability of ₹80,000 crore.The brokerage said the way ahead would be for the Centre and Vodafone Idea to seek clarification on the same from the Supreme Court. It said the Vodafone Idea and Indus Towers stocks may witness weakness unless there is clarity on the Supreme Court’s order.
Also, the Supreme Court clarified that the order is applicable only to Vodafone Idea, given the peculiar facts and circumstances, and hence, Bharti Airtel is unlikely to get any relief, IIFL stated.The brokerage said the Supreme Court’s order can be interpreted in two ways — one is that the “SC merely makes a statement of the fact that the petition pertained to additional AGR demand. The government has the flexibility to work on the entire AGR amount. The other interpretation is that SC’s grant of flexibility is limited only to the additional AGR demand,” it said.
The Supreme Court did not explicitly mention there is flexibility for the Centre for a comprehensive reassessment and reconciliation of all AGR dues, IIFL noted.
“In the absence of a clear directive, we believe that the government may be reluctant to act with complete flexibility, fearing contempt of court proceedings,” according to the note.
Also Watch | Balaji Subramaniam, Vice President at IIFL Capital Services, and Sanjay Asher, Senior Partner at Crawford Bayley & Co., discuss the Supreme Court’s order in the Vodafone Idea AGR case.
Vodafone Idea’s Stock Price Performance
Vodafone Idea shares, which crossed ₹10 apiece after the Supreme Court’s order on Monday, were trading 11.11% lower at ₹8.32 apiece around 10 am on Thursday. The stock has gained 2.3% in the past month.
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