Views on hearing on AGR case presented in the SC yesterday - Keshav Lahoti, Associate Equity Analyst, Angel Broking Ltd.

"The Supreme Court (SC) heard the AGR case on August 18 which was again adjourned to August 19. No conclusion came on staggered payment of AGR dues and whether making Jio liable for Rcom AGR dues. On the Supreme Court's question on whether to make Jio liable for Rcom AGR dues based on spectrum sharing. Jio has made it clear that there is no question of one operator paying dues of another operator and AGR dues payable by it is already paid. Vodafone Idea have paid ₹7,854 cr out of AGR dues of ₹58,254 cr and Airtel have paid ₹18,004 cr out of ₹43,980 cr. Government is of the opinion to allow a 20 years time frame for companies like Airtel, Vodafone Idea to clear their AGR dues. But SC is concerned that if the companies become insolvent within 20 years, then who will pay the AGR dues. We believe Bharti Airtel will be able to make upfront AGR payment even if asked by court by raising money from QIP, debt. Vodafone Idea will be in a tough spot to make upfront payment as it will be difficult for the company to raise money which has negative net worth and is also loss making. Overall, we see upfront payment of AGR dues as a positive development for Airtel and Jio as it raises question mark on survival of Vodafone Idea in the industry."

Source : Equity Bulls

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