TELECOM TRIUMPH

AS per regulations, promoters and promoter groups are ineligible to participate in FPOs

THE Indian government is the single-largest shareholder in Vi with a 32% stake don’t expect Vi to gain any meaningful market share from peers and remain concerned about potential large equity dilution (on the conversion of government dues). Potentially, the GoI could own an 80%+ stake in Vi on a fully diluted basis in the worst case,” said analysts at Kotak Institutional Equities, noting a possibility of an extension of the moratorium, a partial waiver on AGR dues and further relief from the government, which owns a 32% stake in the company.

As per Indian regulations, promoters and promoter groups are ineligible to participate in FPOs. Promoters from the Aditya Birla Group have already invested ₹2,075 crore in the company through a preferential allotment last week, at a premium to the FPO’s price band of ₹10-11 per share.

Responding to queries at a press briefing on anticipated tariff hikes after the general election in June, Moondra backed the need for a correction in prices, saying India’s telecom rates were among the lowest in the world, and investments were not returning the cost of capital deployed.

“In terms of size of increase (in tariff)… we’ve seen what kind of increases have happened in the past and that should be reasonable to think about,” he said. Carriers raised headline tariffs by 20-40% back in December 2019, the first after Jio launched its mobile services in 2016 and made voice calls a free service. This was followed by another hike, this time of 20%, in December 2021.

Vodafone’s management highlighted that 42% of the company’s subscribers are still using 2G service, which leads to a lower average revenue per user, compared to its competitors. But this also presents an opportunity to increase ARPU by upgrading these subscribers, the company said.