Record FDI infusion! Vodafone pumps Rs 47,700 crore to take on Jio
MUMBAI: VodafoneGroup Plc pumped a record Rs 47,700 crore of overseas investment into its Indian operation, slashing the unit's debt by half, priming it for the upcoming spectrum auction and ensuring battlereadiness in the fight for market share as Reliance Jio Infocomm enters the fray
. The capital infusion, which involves converting loans to shares in the first half of the fiscal in the country's secondbiggest phone company, "will enable Vodafone India to continue its investments in spectrum and expansion of networks across various technology layers", said Chief Executive Sunil Sood. This is the largest foreign direct investment (FDI) in India in rupee terms, exceeding BP's $7.2billion purchase of a stake in Reliance Industries BSE 0.95 % .
To put things in perspective, third ranked telco Idea Cellular BSE 0.48 % 's market value at close of trade on Thursday was Rs 31,000 crore on the Bombay Stock Exchange while Reliance Communications BSE 1.64 % was just over Rs 12,100 crore.
Leader Bharti Airtel BSE 0.58 % was at nearly Rs 1,30,795 crore. Vodafone's investment in India since 2007 amounted to Rs 1.15 lakh crore at the end of March. The infusion brings the company's net debt down to Rs 34,300 crore and cuts the debt to equity ratio by half, said Sood. At the end of the last financial year, this stood at Rs 81,500 crore, leaving little free cash. "We are judiciously deploying a portfolio of technologies — 2G, 3G, 4G and IoT (Internet of Things) — to cater to the myriad connectivity needs of our retail and enterprise
The move signals Vodafone's aggressive intent in the spectrum auction that's set to start October 1, especially for 4G airwaves, experts said. "Vodafone needed it (infusion). We have seen others increasing capex and Vodafone doesn't have that panIndia 3G/4G network that it will need," said Kunal Bajaj, an industry consultant.
The mobile phone operator has 4G spectrum in nine of the country's 22 circles, with operations in eight, lagging behind Jio and market leader Bharti Airtel's panIndia holdings. India is set to sell spectrum, valued at Rs 5.6 lakh crore at the reserve price, including airwaves in the 4G and 3G bands. Besides 4G, analysts said Vodafone may buy 3G airwaves to plug coverage gaps.
Vodafone may spend big Brokerage PhillipCapital expects Vodafone to spend about Rs 11,300 crore in the upcoming auction, more than its rivals Jio, Airtel and Idea Cellular. Vodafone has struggled in the past few years with challenger Idea Cellular gaining over it in many areas but Sood said his company had gained a 0.6 percentage point market share in the last half year.
full article :http://economictimes.indiatimes.com...crore-to-take-on-jio/articleshow/54472922.cms
MUMBAI: VodafoneGroup Plc pumped a record Rs 47,700 crore of overseas investment into its Indian operation, slashing the unit's debt by half, priming it for the upcoming spectrum auction and ensuring battlereadiness in the fight for market share as Reliance Jio Infocomm enters the fray
. The capital infusion, which involves converting loans to shares in the first half of the fiscal in the country's secondbiggest phone company, "will enable Vodafone India to continue its investments in spectrum and expansion of networks across various technology layers", said Chief Executive Sunil Sood. This is the largest foreign direct investment (FDI) in India in rupee terms, exceeding BP's $7.2billion purchase of a stake in Reliance Industries BSE 0.95 % .
To put things in perspective, third ranked telco Idea Cellular BSE 0.48 % 's market value at close of trade on Thursday was Rs 31,000 crore on the Bombay Stock Exchange while Reliance Communications BSE 1.64 % was just over Rs 12,100 crore.
Leader Bharti Airtel BSE 0.58 % was at nearly Rs 1,30,795 crore. Vodafone's investment in India since 2007 amounted to Rs 1.15 lakh crore at the end of March. The infusion brings the company's net debt down to Rs 34,300 crore and cuts the debt to equity ratio by half, said Sood. At the end of the last financial year, this stood at Rs 81,500 crore, leaving little free cash. "We are judiciously deploying a portfolio of technologies — 2G, 3G, 4G and IoT (Internet of Things) — to cater to the myriad connectivity needs of our retail and enterprise
The move signals Vodafone's aggressive intent in the spectrum auction that's set to start October 1, especially for 4G airwaves, experts said. "Vodafone needed it (infusion). We have seen others increasing capex and Vodafone doesn't have that panIndia 3G/4G network that it will need," said Kunal Bajaj, an industry consultant.
The mobile phone operator has 4G spectrum in nine of the country's 22 circles, with operations in eight, lagging behind Jio and market leader Bharti Airtel's panIndia holdings. India is set to sell spectrum, valued at Rs 5.6 lakh crore at the reserve price, including airwaves in the 4G and 3G bands. Besides 4G, analysts said Vodafone may buy 3G airwaves to plug coverage gaps.
Vodafone may spend big Brokerage PhillipCapital expects Vodafone to spend about Rs 11,300 crore in the upcoming auction, more than its rivals Jio, Airtel and Idea Cellular. Vodafone has struggled in the past few years with challenger Idea Cellular gaining over it in many areas but Sood said his company had gained a 0.6 percentage point market share in the last half year.
full article :http://economictimes.indiatimes.com...crore-to-take-on-jio/articleshow/54472922.cms
