India’s top court on Thursday rejected a request by telecom companies to recalculate the dues they owed the government, sending shares of debt-saddled Vodafone Idea and its peers down.
Analysts at ICRA estimate that Vodafone Idea and Bharti Airtel owe 1 trillion rupees ($12 billion) in past dues, including spectrum charges and licensing fees. They, however, did not shed light on the amount owed by other companies.
The companies, in a last-resort petition against a similar ruling by the top court in 2021, had argued that the telecom department made errors in calculating the so-called adjusted gross revenue (AGR) dues.
Telecom firms had long contested that only revenue accrued from core services should be taken into account when computing the dues, while the government argued that AGR should include non-core revenue as well, such as money from rent or land sales.
The Supreme Court had, in 2019, ruled in favour of the government’s definition of AGR calculations.
The latest ruling is a setback for Vodafone Idea, which owes the government around 700 billion rupees in license fees and spectrum charges, according to its latest quarterly report.
Analysts did not expect the ruling to have a major impact on Bharti Airtel due to its stronger financials.
Shares of Vodafone Idea slumped about 20% after the news, while Bharti Airtel briefly turned negative, but closed 0.6% higher.
