Bharti Airtel share price rose over 6% today after the Supreme Court allowed telcos 10 years to make staggered payment of the pending AGR dues. Share price of Bharti Airtel gained 6.37% to Rs 546.7 against previous close of Rs 513.95.
However, stock of another telco Vodafone Idea slipped 24.53% to Rs 7.69 on BSE as the firm expected period of 15 years for payment of dues.
The apex court said telecom companies have to pay 10 per cent of total pending dues upfront and can't default on the annual payments. Airtel's AGR dues stood at Rs 43,980 crore, of which the telco has paid Rs 18,000 crore. Vodafone Idea still owes more than Rs 50,000 crore to the Centre in AGR dues.
Vodafone Idea had sought 15 years to pay its AGR dues, including spectrum usage charge, license fee, interest, penalty, and interest on penalty.
Jaikishan Parmar, Sr. Equity Research Analyst at Angel Broking said,"Banks with exposure towards Vodafone Idea corrected as street was expecting 15 or 20 years of staggered payment. We could see some pressure in the near term in select banks with exposure to Vodafone Idea as staggered payment allowed for 10 years instead of company /Government demanded 15/20 years. And investors will be in wait and watch mode as tomorrow SC will also give hearing on interest charged on the interest component for the moratorium."
The court said if telcos default on the annual AGR installment, interest would accrue and it may also invite contempt of court.
Abhimanyu Sofat, Head of Research, IIFL Securities Ltd said, "The judgement is a relief for Bharti Airtel as they won't have to pay for old dues of companies from whom they bought spectrum. The window for vodafone to raise funds, have better models and give paybacks commitment is small which is adding the pressure on the stock. "
By Aseem Thapliyal