Vodafone Idea shares slide sharply on Monday, dropping over 11 percent, even as reports suggested that the Union Cabinet has approved an adjusted gross revenue (AGR) relief package for the struggling telecom operator. While the decision offers temporary breathing space through a five-year moratorium on dues, investors clearly expected stronger relief measures. As a result, traders booked profits after a sharp recent rally, pushing the stock into negative territory.
During intraday trade, Vodafone Idea shares plunged as much as 15 percent to hit a low of Rs 10.25. However, the stock later recovered part of the losses and closed at Rs 10.67 apiece, still down more than 11 percent for the session. Earlier in the day, the counter had surged over 6 percent to touch a fresh 52-week high of Rs 12.8, which underlined the heightened volatility around policy-related developments.
According to media reports, the Union Cabinet approved a relief framework granting Vodafone Idea a five-year moratorium on its AGR liabilities. In addition, the government agreed to freeze AGR dues worth Rs 87,695 crore. These repayments will be rescheduled over a long horizon from FY32 to FY41. Meanwhile, dues related to FY18 and FY19 will be paid over the next five years. Consequently, the move eases near-term cash flow pressure. However, it does not eliminate the burden entirely.
Separately, the government will form a committee under the Department of Telecommunications (DoT). The committee will reassess and re-evaluate the AGR dues. This process will involve reviewing audit reports and examining the scope for interest or penalty reversals. Furthermore, sources indicated that authorities may recalculate the frozen dues based on these findings. This step could offer limited relief in the future.
However, despite these measures, market sentiment remained cautious. Investors had largely priced in expectations of a waiver rather than a deferment. As a result, disappointment weighed on the stock.
“The five-year moratorium gives the company recovery time. However, the street was anticipating a waiver of some sort, which has not happened,” said Vinit Bolinjkar, head of research at Ventura Securities. Therefore, once the details became clearer, selling pressure intensified.
Meanwhile, Vodafone Idea continues to operate under severe financial stress. The company has repeatedly stated that it needs sustained funding support to survive. At the same time, banks remain wary of extending fresh loans due to its stretched balance sheet.
Currently, the telecom operator employs over 18,000 people. It also serves nearly 198 million subscribers across the country. As a result, its stability remains crucial for the broader telecom sector.
In parallel, the government has increased its involvement in the company. In March this year, it became the largest shareholder with a nearly 49 percent stake. This followed the conversion of dues worth Rs 36,950 crore into equity. Earlier, in 2023, the Centre had acquired a 33 percent stake. That move came after it converted statutory dues exceeding Rs 16,000 crore into equity.
Recently, hopes had risen after the Supreme Court allowed the government to comprehensively reassess AGR dues, including interest and penalties, up to FY17. As a result, Vodafone Idea shares had rallied strongly. However, since the Cabinet approval stopped short of a waiver, those expectations moderated quickly. Despite the sharp fall, Vodafone Idea shares slide after having still gained over 33 percent in 2025 and about 44 percent in the past six months, reflecting the stock’s high-risk and high-volatility nature amid ongoing uncertainty.
