Vodafone Idea Rallies 2.5%, Airtel Erases Gains After Bombay HC Quashes Spectrum Charge Demands 

Mumbai, June 9: Shares of telecom operators surged in early trade on Tuesday after the Bombay High Court struck down the government’s one-time spectrum charge (OTSC) demands, delivering a major legal victory to the sector.

Vodafone Idea share price rose as much as 2.5%, while Bharti Airtel share price gained up to 0.9% before surrendering its gains and slipping into the red later in the session.

The rally followed the Bombay High Court’s decision on Monday to set aside the Centre’s retrospective levy of one-time spectrum charges on Bharti Airtel and Vodafone Idea. The court also annulled all actions taken pursuant to the disputed demands, providing significant relief to both telecom operators. As of writing Vodafone was up 1.4% at Rs 14.6 while Airtel was down 0.7% at Rs 1,800.

Relief From Over-Decade-Old Dispute

Vodafone Idea, which is grappling with debt, rose after HC set aside an adverse government demand related to spectrum charges. Source: NSE 

The dispute dates back to 2012, when the Department of Telecommunications (DoT) sought to levy a one-time charge on spectrum holdings beyond the prescribed limits, with retrospective effect from 2008. Telecom operators challenged the move, arguing that the levy had no basis.

In its ruling, the High Court held that the government lacked the authority to retrospectively impose such charges. The court consequently quashed the impugned orders and related demand notices.

Significant Financial Implications

Bharti Airtel was happy after the court ruling but profit booking ruined the sentiment. Source: NSE

The judgment removes a long-standing overhang for the telecom sector. According to industry estimates, the disputed demands on Airtel and Vodafone Idea together amounted to roughly Rs 23,600 crore. Vodafone Idea, which continues to grapple with a heavy debt burden and adjusted gross revenue (AGR) liabilities, stands to benefit significantly from the ruling.

For Airtel, the verdict provides clarity on a contingent liability that had remained unresolved for years. The company had previously made provisions against potential liabilities arising from the dispute.

Why Airtel Turned Negative

Despite the positive development, Airtel failed to hold on to its early gains as investors booked profits following the initial rally. The broader market mood also remained cautious amid concerns over global bond yields and geopolitical developments, which weighed on sentiment in several large-cap stocks.

Market participants will now watch whether the Centre decides to challenge the Bombay High Court ruling before the Supreme Court. For now, however, the judgment is being viewed as a major boost for the telecom sector, removing a significant source of legal and financial uncertainty.

Source:

• https://www.nseindia.com/get-quote/equity/IDEA/Vodafone-Idea-Limited
• https://www.nseindia.com/get-quote/equity/BHARTIARTL/Bharti-Airtel-Limited