ICRA analysts estimated that Vodafone Idea and Bharti Airtel owed a total of 1 trillion rupees ($12 billion), including spectrum and licence fees, but did not reveal how much the other companies were owed.
The two companies, in their final plea filed against a similar Supreme Court ruling in 2021, had argued that the telecom department had made mistakes in calculating the so-called adjusted gross revenue (AGR) dues.
Telecom companies have long maintained that only revenue generated from core services should be considered while calculating dues, while the government has argued that AGR should also include non-core revenue such as rent or land sale income.
In 2019, the Supreme Court ruled in favor of the government’s definition of AGR calculation.
This latest ruling is a setback for Vodafone Idea, which owes the government about Rs 70,000 crore in licence and spectrum fees, according to its latest quarterly report.
The Indian government is also one of the company’s largest shareholders, holding a 23.1% stake.
Analysts do not expect the ruling to have a significant impact on Bharti Airtel as it is in a strong financial position.
Vodafone Idea shares fell about 20% following the news, while Bharti Airtel shares briefly fell but closed 0.6% higher.
“A positive ruling will reduce Vodafone’s debt by Rs 35,000 crore,” said Balaji Subramanian, research analyst at IIFL Securities.
He said the ruling made Vodafone’s debt financing of Rs 25,000 crore challenging as less cash flow would make banks wary of taking on the company’s risk.
“If the rescue is in place, their annual cash flow will increase by Rs 8,000 crore.”
Vodafone Idea and Bharti Airtel did not immediately respond to Reuters’ request for comment.
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