Vodafone Idea shares – Relief from Supreme Court for now, but what lies ahead

Vodafone Idea shares are seeing some volatility today, 27^th October, 2025. The stock started the day in green. Then the hearing on its plea on getting AGR relief in Supreme Court started at 11 a.m. The stock price then fell sharply, in the next 10 minutes, by around 3.7%. But then it started rising sharply again. At 11:50 a.m. IST, the stock price was up by 8.52%, trading at Rs 10.44. This sharp rise came after the Supreme Court allowed the central government to consider the appeal of Vodafone Idea to look into the alleged errors in the calculation of AGR dues by Department of Telecom.

The central government at the start of the hearing today said that it was willing to consider Vodafone Idea’s request. The Court then gave the government a go-ahead on the ground that it was a policy issue and the government has the right to reconsider the issue.

Why is Vodafone Idea contesting the AGR dues demand?

Vodafone and Bharti Airtel both have been arguing that there are errors in the AGR dues that Department of Telecom (DoT) has raised against them. The dues that telecom companies have to pay to the government include mainly the license fee and spectrum usage fee. This fee is calculated on the basis of the adjusted gross revenues (AGR) of the telecom companies.

Before 2021, AGR included both revenue from telecom operations and revenue from other sources. So, for example, the interest that a telecom company earned on its bank deposits was included in the AGR. This in turn increased the charges that the telecom companies had to pay to the government. These charges are based on a percentage of AGR.

The rule change in 2021

In 2021, this rule was changed. Only revenue from telecom operations can be included in AGR now for calculation of dues that telecom companies have to pay to the government. Non-operational revenues cannot be included in calculation of AGR dues. Vodafone has sought relief on this ground for the Rs 5,606 crore AGR dues demand raised on it by DoT for the year 2016-17.

Vodafone is also contesting that the calculation of AGR dues includes many mathematical errors such as doubly entry of many items. The decision of the Supreme Court today comes as a relief to Vodafone Idea. Government now owns around 50% stake in the company. So the government is expected to provided some significant relief on the AGR dues of the company.

Vodafone Idea shares have gained more than 25% in 2025

Year-to-date in 2025, Vodafone Idea’s stock price has increased by around 26%. Nifty 50 index has gained 9.50% in this period. Nifty Midsmall IT & Telecom index has lost 17.60% Year-to-date (YTD) in 2025. Vodafone Idea is a constituent of Nifty Midsmall IT & Telecom index. Its weight in the index currently is 5.88%.

Biggest challenge before Vodafone Idea

The biggest challenge before Vodafone Idea is that it lags behind Bharti Airtel and Reliance Jio in 5G rollout. The 5G network of Vodafone idea currently is available in only around 17 Indian cities. Bharti Airtel and Jio’s 5G network now extends to almost all Indian cities and districts. This lagging behind in 5G network is causing Vodafone Idea to lose subscribers. In the June 2025 quarter, the company reported a subscriber loss of around 500,000 customers. At the end of August 2025, total subscriber base of Vodafone Idea stood at 12.758 crore. Bharti Airtel’s subscriber base stood at 30.7 crore. Reliance Jio’s subscriber base stood at 49.8 crore.

Competition from more aggressive  BSNL

Another challenge that has risen before Vodafone Idea is the increase in competition from BSNL. BSNL seems to be expanding aggressively in the rural areas. In the three month period between July and September, 2025, BSNL added 13 lakh new customers. It will be rolling out its 5G services in Delhi and Mumbai in December, 2025.

In the June 2025 quarter, Vodafone Idea posted a net loss of Rs 6,608 crore. This was a year-on-year increase of 2.73% in its net loss. But on a quarter-on-quarter basis this was a decline of 8.39%. Revenues of the company in the June quarter increased by 3.71% year-on-year to Rs 11,164 crore. On a quarter-on-quarter basis, this increase was of 1.19%.  At the end of FY 25, Vodafone Idea had bank balance and cash & cash equivalents of around Rs 10,500 crore.

How will Vodafone Idea raise enough capital to extend its 5G network to the scale of Bharti Airtel and Jio? Where can it cut down costs to narrow down its loses without affecting its service quality? How will it face additional competition from BSNL? These questions remain unanswered. That makes Vodafone Idea still a very risky stock for the medium and long term. For the short term, the relief today is definitely a boost.

Disclaimer : This content is only for informational purpose. It does not make any recommendation to act or invest.

Source: NSE, Vodafone Idea