Shares of Indus Towers rose 13% on February 6 after the government asked Vodafone Idea to convert adjusted gross revenue (AGR) dues into equity, with Bharti Airtel buying a stake in the tower company from its subsidiary.

It was the second-biggest gainer in the futures and options space, with the NSE trading at Rs 163 at 3:22 pm, up 13.3%.

The government on Friday asked telecom operator Vodafone Idea to convert AGR dues into equity, raising some hope for mobile tower installers to get payments from the government.

“The Government of India has directed Vodafone Idea to convert the interest NPV associated with the deferral of spectrum auction instalments and AGR dues into shares to be issued to the Government of India following the Reform and Support Package for Telecom Sector announced earlier,” Vodafone Idea said in a filing stated in a document to the exchange. The total amount converted into equity was Rs 16,133.18 crore.

Indus Towers posted a consolidated loss of Rs 708.2 crore for the quarter that ended December 2023, mainly due to a doubtful debt provision for overdue amounts recoverable by one of the telecom operators. The company did not mention the name of the telecom operator, but experts say it is Vodafone Idea.

In an exchange filing dated January 24, Indus Towers said: “One of the group’s largest customers accounted for a significant portion of net sales for the December quarter FY23 and constituted outstanding trade receivables as of December 2022. A significant portion of accounts and unbilled revenue.”

During the quarter, the company received some payments from the telecom operator committed through December 2022. Still, the telecom operator indicated challenges in complying with higher payment schedules in the future, which resulted in an additional provision for bad debts in December at Rs 2,298.1 crore for the FY23 quarter.

Bharti Airtel bought an additional 23.01% stake in Indus Towers from its subsidiary Nettle Infrastructure Investments, raising its stake to 47.95% from 24.94%.

The acquisition of this additional stake is a merger arrangement effective February 1 2023, under the Nettle and Telesonic Merger Arrangement between Nettle Infrastructure, Telesonic Networks and Airtel. Nettle and Telesonic are subsidiaries of Airtel.

After a recent consolidation, Indus Towers stock opened higher on February 6 and formed a long-term bullish candlestick pattern on the daily bar chart. It started trading above a sizeable bearish candlestick pattern that began immediately after the release of the quarterly earnings scorecard on January 27.