Mint - After getting relief from the Government of India on AGR dues payment, Vodafone Idea share price has been seeing uptrend since morning. Vodafone Idea share price today opened upside and went on to hit intraday high Rs 8.55 apiece levels, logging to the tune of 25% rise on Monday morning deals. Read more
Vodafone Idea shares surged 25% in trade on Monday as the government permitted converting the telecom operator's interest dues into equity. The net present value of the interest dues regarding the AGR dues and deferment of spectrum auction installments amounts to ₹16,133.10 crore, which will be converted into a 33% stake in the loss- making operator.
What is AGR? Adjusted Gross Revenue (AGR) is the usage and licensing fee that telecom operators are charged by the Department of Telecommunications (DoT). It is divided into spectrum usage charges and licensing fees, pegged between 3-5% and 8% respectively.
As per DoT, the charges are calculated based on all revenues earned by a telecom operator including non-telecom related sources such as deposit interests and asset sales.
The government has already clarified in a media interaction that it has no desire to run the company after the conversion and nor do they want a duopoly in the telecom market in India. The government would act as a sleeping partner to support the company running the business which will help the firm improve in the tight competition against Airtel and Jio.
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