The dismissal of the review petition on adjusted gross revenue (AGR) by the Supreme Court has raised the possibility of two players dominating the market. All eyes are now on the future of Vodafone Idea, which has a subscriber base of over 33.62 crore.

The joint venture between the AV Birla group and Vodafone Plc appears to be the most vulnerable as it faces dues of Rs 53,000 crore and has not yet tied up the required funds.

On the other hand, Bharti Airtel is on a relatively strong position as it has raised $3 billion through a mix of qualified institutional placement (QIP) and foreign currency convertible bonds (FCCBs).

While a spokesperson from Vodafone Idea was not available for comment, there have been clear indications from its top brass of the company’s unwillingness to raise fresh capital to meet its dues and the possibility of shutting down operations in the absence of any relief.

“I think that we can expect much more stimulus from the government because it is required for the sector to survive. If we weren’t getting anything then I think it is the end of the story for Vodafone Idea....It does not make sense to put good money after bad,” Kumar Mangalam Birla, chairman of Vodafone Idea, had said at an event in December. The dues that Vodafone Idea will have to pay are more than three times its market capitalisation.

During the second quarter ended September 30, the company had posted a consolidated loss of Rs 50,921.9 crore after making provisions of Rs 25,680 crore as dues to the government.

Beneficiaries

In the absence of relief and with Vodafone Idea taking a painful decision, Jio and Bharti Airtel would be the major gainers.

“Given the implications of today’s development on both telcos and non-telcos, there is a possibility of the government making some relaxation in the payment tenure. For this to happen, the Centre will have to take an approval from the Supreme Court,” an analyst said.

Apart from Airtel and Vodafone Idea, PSU firms such as GAIL have dues with the government.