Vodafone Idea Ltd (VIL) landing up in the National Company Law Tribunal (NCLT) cannot be ruled out, which could be triggered by the operator approaching the tribunal or the Department of Telecommunications (DoT) invoking bank guarantees, according to a report by IIFL Securities.

The current promoters will have to cede ownership and more operational disruption could result. Media reports had mentioned that DoT, in its plea, had warned that a VIL shutdown and resulting mass number porting could overwhelm the other surviving telcos – at a time when the economy may face pressure from Covid-19, this is one disruption the country could have done without, the brokerage firm said in its report.

Telcos have to furnish bank guarantees covering two quarters of License Fee (LF) and Spectrum Usage Charges (which adds up to ₹2,000 crore for VIL) and the next annual instalment of spectrum payments (₹15,000 crore for VIL to be paid in FY23 after the moratorium).

“Thus we estimate VIL’s bank guarantees to be in the Rs 16,000-18,000 crore range. Licence conditions allow DoT to invoke bank guarantees if it ends up defaulting on AGR dues. Based on public disclosures of banks, we assess the fund based and non-fund based exposure of different banks to VIL,” it added.

The Supreme Court on Wednesday pulled up the DoT for allowing self-assessment of Adjusted Gross Reveue dues but has consented to hear the DoT’s plea on allowing telcos reasonable time to pay the dues.

With the apex court referring to AGR dues as public money, the government is in a tight spot with respect to granting any further concessions on the AGR issue, it said.

A scenario where VIL is forced into NCLT is negative for the government. The situation could be salvaged if the SC allows telcos to make deferred payments on AGR dues.

However, Bharti is on a “strong wicket”, it said.

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