Voda Idea shares surge 11% from day’s low as SC sees no impediment with Centre reconsidering issue

Synopsis

Vodafone Idea shares surged over 11% after the government informed the Supreme Court it's willing to reconsider the telecom company's issues. The court saw no impediment, noting the government's equity stake and Vodafone Idea's large customer base as factors for review.

Shares of beleaguered telecom company Vodafone India witnessed a sharp U-turn, gaining as much as 13.3% from the day's low to hit a fresh 52-week high of Rs 10.52 on the NSE, after the government informed the court that it is willing to examine the issues raised by the company and is also prepared to reconsider the matter and take an appropriate decision, subject to the court’s permission. The stock opened in the red, down 2% to its day low of Rs 9.28.

In its order, the Supreme Court said it sees no impediment in the Centre reconsidering the issue and taking an appropriate decision in the matter. The court clarified that the order applies only to the peculiar facts of this case, given the government’s equity stake in Vodafone Idea and the company’s base of over 20 crore customers.

The court further stated that there is no reason why the Centre should be prevented from reviewing the matter, while clarifying that the order applies only to the peculiar facts of this case, given the government’s stake and Vodafone Idea’s large customer base.

The apex court observed that the matter falls within the Union’s policy domain. On October 13, the Supreme Court had deferred the hearing of Vodafone Idea’s plea in the AGR dues case to October 27. The debt-laden telecom firm challenged the DoT’s demand, seeking to quash additional AGR dues of Rs 5,606 crore claimed for the period up to FY2016–17.

A bench headed by Chief Justice of India BR Gavai delivered the order after hearing Solicitor General Tushar Mehta, who informed the court that the government has infused equity to the extent of 49% in the telecom company and that the decision was driven by concerns for over 20 crore consumers.

“That was one of the reasons for which the government took this decision. The consumers would suffer if they have concerns, something like duplicate billing, some over-invoicing etc, this what I have proposed,” Mehta told the court.

Clarifying the scope of the relief, the CJI said: “We clarify that this is in the policy domain of the Union... there is no reason as to why that Union should be prevented from doing so, with that view of the matter, we dispose of the writ petition.”

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