Vodafone Idea shares rally 10% on promoter funding and AGR relief hopes

Mumbai | January 1

Shares of Vodafone Idea rose sharply in early trade on January 1 after the telecom company disclosed fresh financial support from its promoters, while reports of government relief on its AGR dues added to positive sentiment.

The stock climbed over 9% intraday and touched a high of ₹11.93 on the NSE, as investors welcomed improved clarity on funding and regulatory support for the company. Vodafone Idea shares have gained more than 42% over the past year, amid expectations of financial and policy support.

Promoters to provide ₹5,836 crore support

Vodafone Idea said it has signed a revised agreement with its promoter, Vodafone Group, to receive ₹5,836 crore.

Under the arrangement, ₹2,307 crore will be infused as cash over the next 12 months. The balance amount of ₹3,529 crore will be raised through the sale of equity shares held by Vodafone Group shareholders, with proceeds to be passed on to Vodafone Idea.

The company said the funding will help strengthen its financial position and support cash flows.

Why Vodafone Group is providing the funds
The funding is linked to the Contingent Liability Adjustment Mechanism (CLAM) that was put in place during the Vodafone India–Idea Cellular merger. Under CLAM, the promoters had agreed to settle certain legal, tax and regulatory liabilities related to the period before the merger.

The revised agreement finalises these obligations and provides Vodafone Idea with clarity on the amount and timing of funds it will receive.

As part of the revised structure, 328 crore Vodafone Idea shares held by Vodafone Group shareholders have been pledged for five years. Vodafone Idea can ask for these shares to be sold in phases, depending on its funding needs.

Cabinet clears AGR relief, say sources

Sentiment was further lifted after reports said the Union Cabinet has approved relief on Vodafone Idea’s adjusted gross revenue (AGR) dues. Government sources said the Cabinet has cleared a five-year moratorium on AGR payments and frozen the company’s dues at ₹87,695 crore.

Repayments will now start from FY 2032 and continue till FY 2041, easing near-term pressure on the company. Sources also said the Department of Telecommunications will form a committee to reassess the dues based on audit findings, including a review of interest and penalty components.

What is AGR
AGR (Adjusted Gross Revenue) dues are payments that telecom companies owe the government based on their adjusted gross revenue. These dues include licence fees and spectrum usage charges.

Company yet to receive official communication

Vodafone Idea said it has not received any formal communication from the government on the reported AGR relief so far and will update exchanges once details are officially conveyed.

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