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    IDEA   INE669E01016

VODAFONE IDEA LIMITED

(IDEA)
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Delayed NSE India Stock Exchange  -  05/18 07:14:08 am EDT
9.200 INR   -1.60%
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India's Vodafone Idea approves conversion of spectrum interest, govt dues into equity

01/10/2022 | 10:36pm EDT

BENGALURU, Jan 11 (Reuters) - Indian telecom operator Vodafone Idea Ltd said on Tuesday its board has approved conversion of the full amount of interest related to spectrum auction installments and dues owed to the government for use of airwaves into equity.

The "net present value" of the interest is expected to be about 160 billion Indian rupees ($2.16 billion), according to the company's estimates.

Vodafone Idea's shares were down 10% at 13.40 rupees.

Following the conversion into equity, the Indian government is expected to hold about 35.8% of the total outstanding shares of Vodafone Idea. Promoter shareholders Vodafone Group will hold 28.5% and Aditya Birla Group 17.8%.

"Dilution in stake is something the promoters or existing shareholders do not welcome much. Somewhere around 10% to 15% of dilution to the government would have been welcomed," said Likhita Chepa, senior research analyst at CapitalVia Global Research.

India's telecom sector was disrupted by the entry of billionaire Mukesh Ambani's Reliance Jio and forced some rivals out of the market. The sector's troubles have also been compounded by the huge dues owed to the government.

Vodafone Idea, a combination of the India unit of Britain's Vodafone Group and Idea Cellular, has paid the government 78.54 billion rupees in dues, but still owes roughly 500 billion rupees.

India's top court in 2020 gave telecom firms 10 years until 2031 to clear dues, but rejected a plea last year seeking corrections to the calculation.

Larger rival Bharti Airtel said on Friday it will not convert interest and government dues into equity.

"From the sector perspective it is clear that the market will not shrink to two players ... the government coming in doesn't change anything in terms of a competitive landscape as they are not infusing any capital," Ambit Capital analyst Vivekanand Subbaraman said.

($1 = 74.0130 Indian rupees) (Reporting by Nallur Sethuraman in Bengaluru; Editing by Subhranshu Sahu and Shounak Dasgupta)


© Reuters 2022
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VODAFONE GROUP PLC -0.91% 119.18 Delayed Quote.7.16%
VODAFONE IDEA LIMITED -1.60% 9.2 Delayed Quote.-39.09%
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Analyst Recommendations on VODAFONE IDEA LIMITED
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Financials
Sales 2022 387 B 4 991 M 4 991 M
Net income 2022 -276 611 M -3 571 M -3 571 M
Net Debt 2022 1 982 B 25 582 M 25 582 M
P/E ratio 2022 -1,01x
Yield 2022 -
Capitalization 300 B 3 877 M 3 877 M
EV / Sales 2022 5,90x
EV / Sales 2023 5,12x
Nbr of Employees 9 173
Free-Float 14,0%
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Number of Analysts 18
Last Close Price 9,35 INR
Average target price 7,21 INR
Spread / Average Target -22,9%
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Ravinder Takkar Chief Executive Officer, Director & MD
Akshaya Moondra Chief Financial Officer
Himanshu Kapania Non-Executive Chairman
Jagbir Singh Chief Technology Officer
Abhijit Kishore Chief Operating Officer
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