Shares of Vodafone Idea have declined as much as 6% on Thursday after the Supreme Court upheld the Adjusted Gross Revenue ruling against the telecom companies and upheld the quantum of the AGR demand.

Vodafone Idea reported an AGR liability of Rs 70,300 crore, including accumulated interest. VIL’s self-assessed AGR liability was 50 per cent lower at Rs 35,400 crore.

The court upheld the earlier decision, thereby reinforcing the obligation of telecom companies to pay their AGR dues.

Brokerage firm Citi, in a note on August 29 had said that any favourable AGR outcome would boost Vodafone Idea's share price by ₹4 to ₹5 per share or even higher, or more than 25% benefit on its current market price.

The sharp 20 per cent correction in the stock price, more or less captures the value of the incremental liability, over and above what the Street was expecting, Nuvama said in a note.

Vodafone Idea (VIL) recently reported a massive adjusted gross revenue (AGR) liability of ₹70,300 crore, which includes accumulated interest. However, VIL’s self-assessed AGR liability is significantly lower, at ₹35,400 crore, a 50% reduction compared to the official figure.

Following the Supreme Court’s dismissal, Vodafone-Idea shares plummeted nearly 20% to a 52-week low of ₹10.36 from ₹12.90.

Vodafone Idea's AGR plea dismissal by the Supreme Court could lead to a financial crisis, experts warn. The telco faces annual payments of USD 4-5 billion, raising concerns about its future.

Vodafone Idea’s big problem, even after its FPO and tariff hikes, is its highly stretched balance sheet, with liabilities of Rs 2.5 lakh crore, said brokerages.

Vodafone Idea shares plunged 20% after the Supreme Court rejected its plea to recalculate AGR dues. Analysts believe the company will need to raise funds to repay the dues. Competition and tariff hikes may further impact Vodafone Idea's survival.