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Vodafone Idea unveils repayment schedule for AGR dues after DoT lifeline
Vodafone Idea has laid out a repayment schedule for AGR dues over the next 15 years, lifting a stifling overhang on the debt-laden telecom operator.
The government has finally lifted the AGR overhang for Vodafone Idea Ltd., in what can be seen as a financial lifeline for a telecom company that hasn't turned a profit since the merger in 2018.
The Department of Telecommunications (DoT) has frozen the company’s AGR dues—comprising principal, interest, and penalties accrued between fiscal years 2007 and 2019—as on 31 December 2025, according to a stock exchange filing on Friday.
Vodafone Idea, in which the government has a 49% stake in lieu of debt, has laid out a repayment schedule for its AGR dues, approved by the DoT.
- Vodafone Idea will pay a maximum of ₹124 crore annually over the next six years—March 2026 to March 2031.
- Thereafter, Vodafone Idea will pay a maximum of ₹100 crore annually for the next three years—March 2032 through March 2035.
- The remainer is scheduled for repayment in equal annual installments from March 2036 and March 2041.
Additionally, the DoT will form a committee to reassess Vodafone Idea's total AGR dues, with the regulator stating the committee's decision will be final. The reassessed amount will also be amortised over five-year period ending in 2041.
On 31 December, the government approved a partial moratorium on Vodafone Idea's dues, freezing $9.76 billion (~ ₹87,000 crore) in payments and deferring repayments to the 2030s. At the time, Vodafone Idea had said it had not received any communication about the measure.
The restructuring announced today offers a financial lifeline to Vodafone Idea, allowing it to preserve capital for operations while deferring the bulk of its regulatory payouts for a decade. The stock surged nearly 10% on the news.
The development is also being seen as calculated diplomatic gesture towards the United Kingdom after Prime Minister Keir Starmer visited India in October. The two countries inked a trade deal last year—the biggest since Brexit.
Vodafone Idea AGR case: A chronology of events
Vodafone Idea, the consequence of a merger of Vodafone Group Plc's India unit and Idea Cellular Ltd. of Aditya Birla Group in 2018, has been struggling for survival since then—largely due to the debt it had accumulated.
A significant portion of the debt is adjusted gross revenue dues.
What are AGR dues? India's telecom firms pay a percentage of their annual revenue as licence fees and spectrum usage charges to the goverment. While operators argue AGR should only apply to telecom revenue (calls and data), the DoT includes all revenue—rent, interest income and assets sales, etc.
In 2019, the Supreme Court of India ruled in favour of the DoT on the definition of AGR, saddling telcos with crores of rupees in past dues.
Vodafone Idea debt: Vi was the most hit by the ruling, since it operated in the shadows of behemoths Reliance Jio Infocomm Ltd. and Bharti Airtel Ltd. As on date, Vodafone Idea has a total debt of roughly ₹2 lakh crore. Here's a breakdown:
- AGR dues: ₹70,000 crore to ₹80,000 crore
- Spectrum liabilities: ~ ₹1.4 lakh crore
As on 30 September, Vi had a negative net worth of ₹82,460 crore.
Govt stake in Vodafone Idea — A lifeline
With that kind of debt weighing on operations, Vodafone Idea had time and again warned about its status as a “going concern”. The government had to then step in to rescue, for it doesn't want a duopoly in India's telecom sector.
- In February 2023, the government converted ~ ₹16,000 crore of interest on deferred dues into 33% equity stake.
- In March 2025, the government raised its stake to 49% by converting another ₹36,950 crore of dues into equity.
Despite being the largest shareholder, the government has not assumed control of Vodafone Idea. That's still with Aditya Birla Group and Vodafone Group.
Vodafone Idea in Supreme Court — A timeline
2019: Supreme Court upholds DoT's definition of AGR.
2020: Supreme Court grants telcos 10 years to pay AGR dues.
September 2024: Vi filed a “curative petition” asking the Supreme Court to correct arithmetic errors in the DoT's calculations. The apex court dismissed this petition.
October 2025: The Supreme Court allows the government to reconsider the AGR dues. The SC noted the “huge change in circumstances”—the government now owning 49% of the company—and permits a reassessment.
December 2025: The Union Cabinet/DoT freezes AGR dues as of 31 December 2025, and defers major payments until after 2031.
Vodafone Idea fundraising plans
To be sure, Vi has been attempting to raise funds for operational needs since the AGR case broke out, to limited success.
In mid-2024, Vi raised ₹18,000 crore via a follow-on public offer, as part of a larger ₹24,000 equity raise. A further ₹3,300 crore was raised via NCDs to service debt obligations.
The company has been in talks with banks to raise ₹50,000-55,000 crore in debt, but lenders were hesitant due to the prevailing AGR issue. That stance may quickly change now.
