Big blow for telcos as SC rejects AGR re-computation plea; Vi shares crash

Vi shares dropped practically 10 per cent, trading at Rs 11.61 as of 11.45 AM after opening at Rs 13 on Thursday. Shares of the having a hard time telco had hit day’s low of Rs 10.33 today. It dropped listed below the FPO price of Rs 11.

For Vi, in 2019, the Supreme Court validated the AGR demand raised by the Division of Telecom which converted right into a worry of Rs 58,000 crore. With the passion levy, that burden has actually currently risen to Rs 70,320 crore since completion of FY24.

Vodafone Concept’s alleviative plea in the AGR situation had looked for 3 key solutions: improvement of any errors in the AGR demand computations; a decrease of the fine to 50 per cent of the overall shortage quantity; and a modification of the rate of interest on the penalty to 2 per cent over the State Bank of India’s (SBI) prime lending rate.

These medicinal requests arise out of a leading court order on September 1, 2020, when it stated the business needed to pay their arrears over a 10-year period, after paying 10% of the fees upfront by March 31, 2021.

Of the total Rs 1.47 lakh crore of AGR dues which the telecom operators were called for to pay by January 2020 as an outcome of the pinnacle court’s order, nearly 75% made up rate of interest, charge and interest on fine, the firms stated. The licence charge dues totalled Rs 92,642 crore while the spectrum use fee was Rs 55,054 crore.

The telecommunications drivers in their different alleviative pleas stated they were not testing the charge of permit cost on the heads as defined by the apex court, however are looking for to allot the October 2019 judgment to the limited degree of “penalizing and rate of interest on charge”.

Vi shares slumped virtually 10 per cent, trading at Rs 11.61 as of 11.45 AM after opening at Rs 13 on Thursday. Shares of the struggling telco had actually struck day’s reduced of Rs 10.33 today. It dropped listed below the FPO rate of Rs 11.

Afterwards, the deferred payment cycle would certainly run till 2031 with the 10% total up to be paid by March 31 yearly. The SC had after that said no revaluation of AGR dues would certainly be allowed and any kind of default would certainly invite rate of interest and charge, in addition to contempt of court fees.

Airtel and Vi had, in 2015, asked for the High court to listen to in the “open court” their alleviative applications versus an earlier order, which turned down the appeals for rectification of what they called arithmetical mistakes in DoT’s estimation of AGR charges.

The alleviative applications by Indian telcos, which are usually determined by courts in the chamber and primarily declined, were detailed before a bench consisting of principal justice DY Chandrachud and Justices Sanjiv Khanna and BR Gavai.

In July 2021, the Supreme Court had actually disregarded a plea seeking improvement of errors in the need of AGR dues. The telecommunications firms had then moved the problem to the top court asserting there were several errors in getting to the AGR dues which completed over Rs 1 lakh crore.