Idea Cellular is planning to raise Rs 1,500 crore by issuing unsecured redeemable bonds on a private placement basis, the company informed stock exchanges on Friday. The company plans to sells non-convertible debentures (NCDs) that offers 7.57% coupon rate (basically interest) for a tenure of 5 years. These will be issued in the National Stock Exchange by December 13th for which the maturity date will be December 13, 2021.
The fund raise comes at a time when Idea’s net profit fell significantly by 99.36% to Rs 4.3 crore in Q2 FY17, compared to Rs 675.9 crore in the same quarter last year. However it reported 3.073 million 4G customers for the same quarter, which is up 70% quarter-on-quarter. Note that Reliance Jio launched commercial operation during Q2 FY17, providing free Internet and voice calls. Currently Jio claims 52 million 4G users.
Idea to upgrade 3G sites to 4G
Facing competition from Jio which operates only on a 4G base, Idea said it will upgrade all of its 17 service areas to 3G and/or 4G by March 2017. Currently Idea has deployed 4G services in 10 circles and plans to deploy 4G services in 9 new service areas by March 2017 using newly acquired spectrum in this year’s auctions. Idea bought 349.2 MHz of spectrum for a total of Rs 12,798 crore in 2016 auctions.
Investments in Fiber
During Q2 FY17, Idea said that it upgraded fiber network base to cover 126,000 kilometers, adding more than 25,000 kms in the last one year. The company also claims to have 8,160 Point of Presence (PoPs) or access points across its Fiber line as of Q2 FY17; Idea will utilize these fiber PoPs as a backbone support to its mobile broadband services.
For the quarter ended September 2016 (Q2 FY17), Idea reported:
– Gross revenue stood at Rs 9,300 crore, a decrease of 1.96% from Rs 8,791.5 crore from the preceding quarter.
– EBITDA of Rs 2840.1 crore, a fall of 3.2% from Rs 3074.2 crore in the preceding quarter.
–Mobile data revenue contribution was at 21.9% of service revenue in Q2 FY17.
–Total data subscriber base of 54.063 million increasing 10.22% from 49.05 million in the preceding quarter.