Vodafone Idea share price slumps 8%, Airtel gains over 1%; telecom stocks mixed after SC reserves AGR verdict

Supreme Court reserved its order on the time to be granted to telecom operators including Bharti Airtel and Tata Teleservices to pay their adjusted gross revenue (AGR) dues

Vodafone Idea share price slumped over 8 per cent to Rs Rs 8.24 apiece on BSE, a day after the Supreme Court reserved its order on the time to be granted to telecom operators including Bharti Airtel and Tata Teleservices to pay their adjusted gross revenue (AGR) dues. On the other, Bharti Airtel shares were trading in green with a growth of 1.3 per cent at Rs 583.80 apiece in early morning deals. While Tata Teleservices share price fell 1.3 per cent to trade at Rs 3.61 apiece. In comparison, S&P BSE Sensex was trading 1.31 per cent or 490 points higher at 37,908. “After the Supreme Court reserves order on the timeline of AGR payments by telecom companies, replies or written submissions will be filed by August 7. No adjustment allowed in June order, the price action showing stiff resistance for Bharti Airtel at Rs 615 and Vodafone Idea at Rs 10.40,” Vishal Wagh, Head of Research, Bonanza Portfolio, told Financial Express Online.

The analyst also warned investors that there is a lesser clarity on these telecom companies’ future. “One should enter in the said counter only above these levels as there is a lesser clarity on their future,” he added. Department of telecommunications (DoT) maintained that telcos be given a 20-year period to pay their AGR dues. Bharti Airtel and Vodafone Idea scaled down their demand from 20-year timeline to 15 years. While Tata Teleservices said it was comfortable with a 7-10 year period.

“If the SC grants a payment period of 15 years, as per our estimates, the annual outgo of Bharti Airtel and Vodafone Idea would stand at Rs 3,000 crore and Rs 6,000 crore, respectively,” research and brokerage firm Motilal Oswal Financial Services said in a report.

According to the ICICI Securities, the annual payment for Bharti Airtel and Vodafone Idea in case of the amount pending to be payable in 15 years is Rs 3,400 crore and Rs 6,600 crore, respectively. “Anything less than 15 years would significantly curtail the ability of Vodafone Idea to meet these obligations,” it added.

As per the Department of Telecommunications, out of Bharti Airtel’s nearly Rs 43,000 crore total dues, the company has paid nearly Rs 18,000 crore. Vodafone Idea has paid a total of Rs 7,854 crore to DoT towards the AGR dues, against its total AGR dues of around Rs 58,000 crore. While the total AGR dues for Tata Teleservices, as per the DoT, stands at Rs 16,789 crore, of which the company has paid Rs 4,197 crore so far.