Telecom stocks were trading lower on Tuesday with Vodafone Idea slipping the most after the Supreme Court reserved its order on the government's petition to allow the companies to make staggered payments of the adjusted gross revenue (AGR) dues.

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The share price of Vodafone Idea plunged as much as 10 percent to Rs 8.20 apiece on the NSE. Bharti Airtel was trading 0.36 percent lower at Rs 573.70 per share at 10:18 am while Bharti Infratel fell as much as 2 percent to Rs 199.20 per share.

Another reason for Vodafone Idea slipping in trade today is CLSA view on the stock. The brokerage downgraded Vodafone Idea to Underperform and preferred Bharti Airtel by retaining its Buy rating on the stock.

In its report, the global brokerage said, "Although 20 years of staggered payments are likely and upcoming potential sector floor tariffs, it will likely compel Vodafone Idea’s promoters to reconsider insolvency plans. In our fair value calculation we raise our AGR risk to Rs 12.4/share, lower our target price to Rs 9.2 (Rs 14 earlier)."

Vodafone Idea and Bharti Airtel sought 15 years to repay their dues to the government while Tata Teleservices has said that a seven to 10 year period should suffice for them. The next hearing has been scheduled for August 10.

During the hearing, Vodafone Idea also accepted the demand of Rs 58,000 crore as dues and initially sought a 20 year period for repayment but later revised it to 15 years.

Two days back, the company paid an additional Rs 1,000 crore to the government towards the statutory dues, taking its total payment to an aggregate Rs 7,854 crore.

The Supreme Court observed that telcos should be reasonable in seeking time. "Telcos are dragging us to a corner where we have no options. Telcos are making much more than the dues sought," it noted.

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First Published:Jul 21, 2020 10:21 AM IST