Vodafone Idea shares slide 4% as telco engages with govt for AGR relief post SC plea dismissal

Vodafone Idea (VIL) shares slid 4% in Tuesday’s early trade to a day’s low of Rs 6.75 on the BSE even after the telecom operator said that it is actively engaging with the central government to seek relief on its long-standing Adjusted Gross Revenue (AGR) dues.

However, the stock recovered from its day’s low around 9:45 am, to trade only 1% lower at Rs 6.97.

VIL CEO Akshaya Moondra stated that the company continues to hold discussions with the Centre to find a viable solution for the AGR issue. He highlighted that there should be no constraints on the government’s ability to offer relief, especially since the matter is considered a policy issue, not subject to judicial interference.

Reiterating the financial strain on the company, Moondra cited India’s low Average Revenue Per User (ARPU) and unsustainable data pricing models as major challenges. He advocated for a pricing shift where high data users pay more proportionately, noting that the industry’s current returns are below the cost of capital.

The development follows the Supreme Court's recent dismissal of the company’s plea seeking relief, which dealt a significant blow to the debt-laden telco.

The telco is grappling with AGR dues amounting to nearly Rs 30,000 crore and shrinking market share. According to TRAI data, Vodafone Idea's subscriber base fell by 6.47 lakh in April to 20.47 crore.

Just before the Supreme Court’s verdict, VIL had issued an SOS to the telecom department, warning it would not be able to continue operations beyond FY26 without timely government intervention.

Despite a reduction in net loss to Rs 7,166.1 crore in Q4 FY25, Vodafone Idea remains heavily reliant on external support. Its board recently approved a fundraising plan of up to Rs 20,000 crore, subject to shareholder and regulatory approvals.

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The government currently holds a 49% stake in the company due to equity conversion of dues, but does not intend to take a board seat. Moondra clarified that this stake was solely a consequence of relief measures extended to reduce financial stress.

Vodafone Idea share price target price

After the company’s Q4 results, posted on Friday, domestic brokerage firm Nuvama also weighed in, cutting Vodafone Idea’s share price target to Rs 7.5, from an earlier Rs 8.5, along with a ‘hold’ rating on the same.

Nuvama stated that the Q4FY25 results were largely in line, with revenue declining 0.9% quarter-on-quarter due to weak ARPU growth. While ARPU grew marginally by 0.6% QoQ to Rs 164, the subscriber base declined by 1.6 million.

EBITDA margin contracted 10 basis points to 42.3%, and the company reported a net loss of Rs 71.7 billion. Capex for the quarter stood at Rs 42.3 billion, with FY25 capex at Rs 95.7 billion and Q1FY26 capex guidance in the range of Rs 60–65 billion.

Nuvama highlighted that the balance sheet remains stretched, with a preference for bank borrowings in the upcoming fundraise.

The brokerage also cut its FY26E and FY27E EBITDA estimates by 7% and 4%, respectively, citing significant EPS dilution due to equity fundraising. Vodafone Idea is valued at 11x FY27E EV/EBITDA, and the success of the fundraise is deemed critical for the company’s survival.

Vodafone Idea shares closed 1.7% higher at Rs 7.04 on the BSE on Monday.

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