Vodafone Group throws Rs 47,700 crore via overseas investment into its Indian operation to take on Reliance Jio. Vodafone to slash unit's debt by half, priming it for the upcoming spectrum auction and ensuring battle-readiness in the fight for market share as Jio enters the fray.
The capital infusion will involves converting loans to shares in the first half of the fiscal in the country's second-biggest phone company which will enable Vodafone India to continue its investments in spectrum and expansion of networks.
The Chief Executive of the company, Sunil Sood said, “This is the largest foreign direct investment (FDI) in India in rupee terms, exceeding BP's $7.2-billion purchase of a stake in Reliance Industries.”
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 last financial year, this stood at Rs 81,500 crore, leaving little free cash.
Third ranked telco, Idea Cellular market value was around Rs 31,000 crore on the Bombay Stock Exchange while Reliance Communications was just over Rs 12,100 crore. Leader Bharti Airtel was at nearly Rs 1,30,795 crore.