Telecom Stocks: Telecom companies have suffered a ‘Supreme’ blow. The Supreme Court rejected the curative application regarding AGR (Adjusted gross revenue).
After this news, telecom stocks started falling heavily. Stocks like Vodafone Idea Ltd (NSE: IDEA) and Indus Towers Ltd (NSE: INDUSTOWER) fell by up to 15%.
Indus Towers Ltd fell at a price of 384 rupees. On 19th September, it closed at 389.80 rupees. At the same time, the price of Vodafone Idea Ltd fell to Rs 10.17, which closed at Rs 10.38 yesterday.
The Supreme Court has rejected the petition by telecom companies asking it to reconsider its previous decision regarding Adjusted Gross Income (AGR) Dues.
The court affirmed the earlier decision and stressed the obligation of telecom companies to pay AGR. The decision is a blow to the industry which sought relief from the financial burden imposed on it by AGR calculations.
The court took a tough stance on the issue of ensuring that regulatory requirements are met and the financial health is maintained in the sector.
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What Has The Supreme Court Said?
A bench of Chief Justice D.Y. Chandrachud, Justice Sanjiv Khanna, and Justice B.R. Gavai also rejected the petition of telecom companies requesting to list the curative petitions for hearing in open court.
The curative or corrective petition is the last stop in the Supreme Court, after which there is no legal way to appeal in this court. It is normally done in a closed-door room unless there is a strong case for reconsidering the decision.
The order was issued on August 30 and made public on Thursday. The court rejected the request to list corrective petitions before the court in public. They have looked at the corrective petitions and the related documents.
The court thinks that there are no grounds for a case within the parameters set out in its judgment in Rupa Ashok Hurra vs Ashok Hurra. The petitions for curative treatment are dismissed.
The Supreme Court of India considered arguments from some telecom companies on October 9, last year. In these, a request was made to list their petitions on the AGR dues issue.
The court had earlier in July 2021 dismissed the petition seeking rectification of mistakes in the demand for AGR dues.
The telecom companies had approached the court claiming that there were several mistakes in determining the AGR dues, which totaled more than Rs 1 lakh crore.
Quick Fact
| Company name | Vodafone Idea |
|---|---|
| Issue Impact | AGR dues |
| Court Decision | Supreme Court rejected appeal |
| Share price | Rs 10.17 |
| AGR Amount Disputed | ₹1 lakh crore |
Company name: Indus Towers
| Company name | Indus Towers |
|---|---|
| Issue Impact | AGR dues |
| Court Decision | Supreme Court rejected appeal |
| Share price | 393 rupees |
| Price Before Drop | ₹389 |
| Price After Drop | ₹384 |
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