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ICICI Securities Report
A three- judge bench of the Supreme Court has resolved the adjusted gross revenue case and given the final supplementary order.
In mixed order, Bharti Airtel Ltd. and Reliance Jio have been absolved from any AGR liability arising from spectrum traded with Aircel Ltd. and Reliance Communications Ltd.
However, Bharti Airtel may be held liable for AGR dues of Videocon Industries Ltd. (Rs 15 billion or Rs 2.5/share).
On payment terms, no additional security or personal guarantee is positive for Bharti Airtel and Vodafone Idea, however, 10 years payment period was disappointing.
Further, court has asked to furnish 10% of total dues before March 31,2021.
We do not see much cash flow pressure for Bharti Airtel, however, Vodafone Idea may struggle with rising cash flow requirements.
Vodafone Idea may require significant rise in average revenue per user to remain going, which will be key to watch.
We also expect operators going for curative petition for re-assessment of AGR dues.
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