The Supreme Court yesterday ruled in favour of the government on the AGR (adjusted gross revenue) issue, with grave implications for the sector, pushing the stocks of telcos down sharply. A bench led by Justice Arun Mishra, A.A. Nazeer and M.R Shah, gave the ruling. The government and the telecom sector were locked in a fight over the definition of AGR.

Shares of Vodafone Idea and Bharti Airtelfell sharply after the order came in just after 1 pm. At close of trade on BSE, Vodafone Idea had plunged 23.4% to Rs4.33, touching a 52-week low of Rs4.10. Bharti Airtel shares fell nearly 10% soon after the news, but had recovered to end 3.3% higher at Rs372.45. Bharti Airtel said it was ‘disappointed’ by the verdict, which will ‘further weaken the viability of the sector as a whole.’

“We are disappointed by the verdict of the Hon’ble Supreme Court…This decision has come at a time when the sector is facing severe financial stress and may further weaken the viability of the sector as a whole,” an Airtel spokesperson said in a statement Thursday.

Industry body COAI said the Supreme Court ruling will deal a “disastrous blow” to the industry, given its precarious financial condition. “The question that arises is whether this is the financial straw that finally breaks the back of operators,” Cellular Operators' Association of India (COAI) Director General Rajan Mathews told a news agency.