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SC Refuses Review of AGR Verdict, Mutual Fund Investors Worried About Exposure to Vodafone Idea

Professor of Financial Economics and Part-time Value Investor, Transfin.
Jan 18, 2020 8:20 AM 2 min read

SC's refusal of AGR review plea gets mutual fund investors worried.



SC's refusal of AGR review plea gets mutual fund investors worried.

Between the Devil and the Deep Blue Sea: In a severe blow to telecom operators Bharti Airtel and Vodafone Idea, the Supreme Court yesterday dismissed pleas to review its earlier judgement that had asked them to pay more than 1tr ($14.10bn) of dues to the government. 


Now while Bharti Airtel has to pay outstanding dues worth ₹35,586cr ($5,028m), already debt-laden Vodafone Idea owes the government ₹50,000cr ($7,064m). 


This mounting debt on Vodafone Idea has gotten mutual fund investors worried. Debt mutual funds have a combined exposure of ₹3,390cr ($478m) to Vodafone Idea, according to data from Rupeevest, a mutual fund distributor. Here are some of the biggets exposures.


Among the asset management companies (AMCs) holding the paper, Franklin Templeton AMC has the highest exposure, but others like UTI and Nippon India also have significant investments in the company. Livemint


Meanwhile...: As per sources, Vodafone Idea may offer the government a small part of its statutory dues by January 23 to ensure it doesn’t get a defaulter’s tag, and then seek relief, in a bid to avoid insolnvency proceedings. 


Sources in the know said that the telecom operator may offer under ₹4,000cr ($564m) “as a token amount on January 23”, following which it may ask the Centre to refund or adjust some of the ₹9,000cr ($1,269m) pending input tax credit under GST that it believes the government owes it. ET Telecom News 


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