Vodafone, Airtel in the red as PIL against non-payment of AGR dues moved in SC

Shares of Vodafone Idea Ltd fell 2.2%, while those of Bharti Airtel Ltd declined nearly 1% on Monday after a public interest litigation (PIL) was moved in the Supreme Court, seeking the quashing of a recent direction of the Department of Telecommunications (DoT) on dues related to adjusted gross revenue (AGR).

The DoT on Thursday said it will not take coercive action against telecom companies that failed to meet the court-directed 23 January deadline to pay dues, after Vodafone and Airtel sought more time. The Supreme Court has agreed to hear pleas of telecom companies, seeking easier payment schedule and terms.

The plea, filed by Consumer Rights Foundation, said the DoT’s order amounts to contempt of court. The plea has asked for directions to DoT to take immediate steps to ensure immediate recovery of the dues from the said companies as directed by the apex court in its 24 October order. The BSE Telecom index was down nearly 1% at 1,221.76 points.

Also, rating agency CRISIL, on Friday downgraded the rating on Vodafone non-convertible debentures of Rs3,500 crore to BBB negative watch from BB, with negative implications. The rating agency expects a significant deterioration in Vodafone Idea’s financial risk profile on account of the potential payout against AGR-related liability, payable shortly. There could be some relief from the DoT in the form of deferment of timelines for payment of these liabilities, CRISIL said.