Vodafone Idea posted a loss of Rs 4950.7 crore for the September end quarter, in its first results since being formed, hurt by the continuing price war and higher costs, and unveiled plans to raise Rs25,000 crore through equity and more by selling its fibre assets to take on competition from Reliance Jio and Bharti Airtel.
The mobile phone operator, which was born out of the merger of Vodafone India and Idea Cellular, clocked in revenue of Rs 7663.6 crore for the July-September quarter, which reflected the loss of 13 million subscribers during the quarter and migration of existing ones to lower tariff plans, the company said in a statement Wednesday. The telco ended the quarter with 422 million subscribers.
The numbers include results for Idea Cellular up to August 30, 2018 and for Vodafone Idea from August 31 to September 30 and hence are not comparable to the earlier period, Vodafone Idea said in a statement. The company also reported proforma figures for some parameters as if Vodafone Idea was a merged entity from April 1, 2018, which put revenue at Rs12,023.8 crore, down 7.1% on quarter.
“The merger of two large organizations with complementary strengths has opened multiple opportunities to draw synergies across the board. We have set on a strong course with meticulous pre-merger planning and rigorous post-merger execution,” said Vodafone Idea CEO Balesh Sharma said in the statement.
On its investment plans, the telco said its board was “optimistic” about the long-term outlook for the market and future business, for which equity infusion was needed.
To better fight competitive pressures, “the Board has constituted a Committee of Directors to evaluate potential routes for raising up to Rs 250 billion ($3.5 billion) of equity,” said Vodafone Idea. The equity funding, to be completed by the fiscal fourth quarter ending March end, will ensure “sufficient balance sheet flexibility to successfully execute its strategy,” said the company in its statement.
Promoter shareholders Vodafone Group and Aditya Birla Group will contribute up to Rs. 11000 crore ($1.5 billion) and up to Rs 7250 crore ($1 billion) respectively as part of the capital raise. Vodafone owns a 45.2% stake in the combined entity and the Aditya Birla Group, the promoter company of Idea Cellular, has a 26% stake.
The operator said it could raise money via issue of rights, qualified institutional placement or preferential share or a combination of these options.
Shares of Vodafone Idea closed at Rs 41.45, up by 1.84 % on the BSE on Wednesday. The results were announced after trading hours.