Vodafone Idea Dropped 11% on Last Day of Year 2025

Vodafone Idea's stock market rollercoaster came to a dramatic halt on the last trading day of 2025, with shares dropping more than 11% amid high investor disappointment.

The telecom operator, long burdened by massive debts, saw its stock plummet from an intraday high to end the session sharply lower, even as the Union Cabinet greenlit a relief measure on its adjusted gross revenue dues.

Sharp Decline Caps a Volatile Year for Vodafone Idea

Investors had high hopes riding on rumors of substantial government support for Vodafone Idea, one of India's major telecom players struggling under a mountain of liabilities. Early in the trading session on December 31, the stock surged to a 52-week high of Rs 12.80, fueled by anticipation of a favorable announcement.

But those gains evaporated quickly after details of the Cabinet's decision emerged. Shares tanked as much as 15% intraday, hitting a low of around Rs 10.25 before closing at Rs 10.67, down over 11% from the previous day's close of Rs 12.07. The market capitalization stood at approximately Rs 1.17 lakh crore by the end of the day.

This drop marked a stark contrast to the stock's performance earlier in the year. Vodafone Idea shares had risen more than 33% throughout 2025, with a 44% gain in the preceding six months and a 7% uptick in the month prior. Yet, the final five days saw a 12% slide, underscoring the fragility of sentiment around the company's fortunes.

said Vinit Bolinjkar, head of research at Ventura Securities, capturing the market's frustration.

The 5-year moratorium gives the company recovery time. The street anticipated a waiver of some sort, but that has not happened,

Details of the AGR Relief Package Explained

At the heart of the turmoil was the government's handling of Vodafone Idea's adjusted gross revenue, or AGR, dues—a contentious issue stemming from a 2019 Supreme Court ruling that expanded the definition of revenue liable for government levies. The telco's total AGR liability had ballooned to over Rs 83,400 crore by early 2025, including principal, interest, penalties, and additional demands.

The Cabinet approved freezing these dues at Rs 87,695 crore as of December 31, with repayment deferred to a 10-year window from FY32 to FY41. This moratorium provides breathing room, easing immediate cash flow pressures for the debt-laden firm. However, AGR dues related to financial years 2018 and 2019 remain payable over the next five years, starting from FY26.

Further, the frozen amount will undergo reassessment by the Department of Telecommunications based on audit reports. While this structure offers near-term relief and protects the government's 49% stake in the company, it lacked the debt waiver many had hoped for—expectations ran high for at least a 50% reduction in liabilities.

The package aims to ensure Vodafone Idea's survival, maintaining competition in India's telecom sector alongside giants like Reliance Jio and Bharti Airtel. With nearly 198 million subscribers and over 18,000 employees, the company's collapse could ripple through the industry. It also buys time ahead of a critical March 2026 deadline to repay more than Rs 18,000 crore under a prior moratorium.

Market Reaction and Broader Implications

The sharp sell-off reflected investor letdown, as the relief measure, while helpful, did not address the core debt overhang decisively. Heavy selling pushed the stock to its lower circuit limit at one point, with shares down nearly 15% before a slight recovery. Meanwhile, benchmark indices like the Sensex edged higher, highlighting the sector-specific pain.

Analysts note that without a waiver on interest, penalties, and related charges—which form a bulk of the dues—Vodafone Idea's balance sheet remains strained. Banks have been cautious about lending, leaving the telco repeatedly warning of survival risks absent further support. The partial relief could stabilize operations, but fundraising for 5G rollout and network upgrades remains a hurdle.

For the telecom sector, this development signals government's intent to prop up Vodafone Idea without fully forgiving debts, balancing fiscal prudence with market health. It prevents a potential duopoly but leaves questions about long-term viability. Investors will watch upcoming earnings and funding updates closely into 2026.

In summary, Vodafone Idea's 11% drop on December 31 encapsulated a year of highs and lows, driven by a government relief package that deferred but did not erase AGR burdens, dashing hopes for more aggressive debt relief and closing 2025 on a cautious note for the telecom giant.