Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  MUMBAI STOCK EXCHANGE  >  Bharti Airtel Limited    532454   INE397D01024

BHARTI AIRTEL LIMITED

(532454)
  Report
SummaryChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsPress ReleasesOfficial PublicationsSector news

If Vodafone Idea disconnects, India picks up the bill

share with twitter share with LinkedIn share with facebook
share via e-mail
02/17/2020 | 11:13am EDT
FILE PHOTO: A retail shop owner speaks on his mobile phone outside his closed shop shutters painted with an advertisement for Vodafone at a market in Chennai

India faces a multi-billion-dollar hit to its economy and a tarnished reputation as a place for multinationals to invest unless it can keep Vodafone Idea in business.

Vodafone Idea, a joint venture between Britain's Vodafone Group Plc and India's Idea Cellular, is the most vulnerable of the mobile carriers ordered on Friday to immediately pay billions in unpaid government dues and interest following a Supreme Court ruling.

It has said it cannot immediately pay the $3.9 billion (£3 billion) it owes and its ability to survive was contingent on the government agreeing a flexible payment schedule.

With 13,000 direct employees and loans from banks of about $3.8 billion, Vodafone Idea's potential exit would send shockwaves through India's economy, which is already growing at its slowest pace in 11 years.

"A default of such a large scale could increase India's fiscal deficit by about 40 basis points," Aliasgar Shakir, a research analyst at Motilal Oswal, said.

A 40 basis point increase in fiscal deficit roughly translates to a revenue loss of about 1 trillion rupees (£10.78 billion or $14.01 billion) for Prime Minister Narendra Modi's government, when it is facing the country's first fall in direct taxes in decades.

Another issue is that Vodafone Idea's departure would essentially leave a duopoly between Bharti Airtel and Reliance Jio, which is backed by Asia's richest man Mukesh Ambani.

That could dampen interest in an auction of 5G airwaves expected before the end of March.

A former executive at Vodafone Idea, who asked not to be identified, said the risk of deterring investment was high.

"They have been beaten down by the environment here," the executive said. "(We're sending investors) a very negative signal - it says the trust factor between the government and the industry doesn't exist."

NO EASY ANSWERS

The risks are not lost on Delhi, but finding a solution is fraught.

Two official sources said the government was seeking to come up with a plan that did not violate the court's order.

"(The government) is concerned with what is happening in the sector and its impact on the investment climate," a top Finance Ministry official said, asking to remain anonymous.

A separate source said the government was seeking to structure a relief plan before the next court hearing on March 17, but declined to provide details. The telecoms ministry has been speaking with the prime minister's office to resolve the issue, the official added.

Lawyers in the telecomms sector said the government could urge the court to allow companies to pay over a longer time frame.

India's telecoms ministry did not immediately respond to a request for comment.

Modi has faced criticism for failing to create jobs in a country where about one million job seekers enter the market every month. Even some in the business sector, which broadly cheered him to power, have turned on him. State-run banks are already burdened with some $140 billion in stressed debt.

However necessary, some analysts are sceptical the government can pull together a relief plan in time.

The telcos still have some options, including filing a curative petition to the Supreme Court, although analysts see little chance of success.

"The acceptance of a curative petition itself is an onerous task ? and with the Supreme Court's tough stance now, the merits of opting for this route may have diminished," Morgan Stanley said in a note to clients.

In the meantime, Vodafone Idea has said it will pay 35 billion rupees ($490 million) in dues to the federal government by Feb. 21. Rival Bharti Airtel paid $1.40 billion on Monday, less than a third of the total it owes.

By Sankalp Phartiyal and Aftab Ahmed

Stocks mentioned in the article
ChangeLast1st jan.
AIRTEL AFRICA PLC -9.78% 37.1 Delayed Quote.-48.57%
BHARTI AIRTEL LIMITED 2.64% 440.6 End-of-day quote.0.59%
MORGAN STANLEY -2.41% 34 Delayed Quote.-33.49%
MOTILAL OSWAL FINANCIAL SERVICES LIMITED 2.44% 497.05 End-of-day quote.-4.40%
RELIANCE INDUSTRIES LIMITED 8.08% 1113.75 End-of-day quote.3.71%
VODAFONE GROUP PLC -3.47% 109.1 Delayed Quote.-23.00%
VODAFONE IDEA LIMITED -1.59% 3.1 End-of-day quote.-3.13%
share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news on BHARTI AIRTEL LIMITED
03/18BHARTI AIRTEL : Tiny Indian rights group piles pressure on Vodafone Idea
RE
03/10CISCO : Airtel Collaborates With Cisco to Launch India's First Automated Etherne..
AQ
02/29India's Airtel says $1.1 billion payment complies with top court's order on d..
RE
02/21Global telcos join Alphabet, SoftBank's flying cellphone antenna lobbying eff..
RE
02/17If Vodafone Idea disconnects, India picks up the bill
RE
02/17India's Vodafone Idea to pay 35 billion rupees in telecom dues this week
RE
02/14India orders telcos to pay dues now, after top court threatens contempt
RE
02/14India Supreme Court Rejects Telcos' Plea for More Time to Settle $13 Billion ..
DJ
02/04Bharti Airtel Swung to Net Loss in 3Q -- Earnings Review
DJ
02/04BHARTI AIRTEL : Swung to Net Loss in 3Q
DJ
More news
Financials (INR)
Sales 2020 870 B
EBIT 2020 89 594 M
Net income 2020 -244 393 M
Debt 2020 1 021 B
Yield 2020 0,40%
P/E ratio 2020 -8,11x
P/E ratio 2021 76,7x
EV / Sales2020 3,81x
EV / Sales2021 3,26x
Capitalization 2 296 B
Chart BHARTI AIRTEL LIMITED
Duration : Period :
Bharti Airtel Limited Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends BHARTI AIRTEL LIMITED
Short TermMid-TermLong Term
TrendsNeutralNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 27
Average target price 583,70  INR
Last Close Price 440,60  INR
Spread / Highest target 83,8%
Spread / Average Target 32,5%
Spread / Lowest Target -16,7%
EPS Revisions
Managers
NameTitle
Gopal Vittal CEO, Managing Director & Executive Director
Sunil Bharti Mittal Chairman
Ajai Puri Chief Operating Officer-India & South Asia Region
Nakul Sehgal Chief Financial Officer
Harmeen Mehta Global Chief Information Officer
Sector and Competitors
1st jan.Capitalization (M$)
BHARTI AIRTEL LIMITED0.59%31 908
SOFTBANK CORP.0.37%60 563
CELLNEX TELECOM0.00%17 542
SAFARICOM PLC--.--%10 097
TELE2 AB (PUBL)-1.80%9 269
DIGI.COM BERHAD-0.91%7 849