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Idea to raise Rs 1000 Cr via private bonds issue; sixth proposal in 2 months

Idea Cellular is planning to raise Rs 1000 crore by issuing unsecured redeemable bonds on a private placement basis, the company informed stock exchanges today. It plans to sell non-convertible debentures (NCDs) which offer 8.12% interest for a tenure of 7 years. The bonds will be allotted in the National Stock Exchange (NSE) by 8th February 2017 and the maturity date will be 8th February 2024.

Note that this is Idea’s sixth proposal to raise funds via private bonds in the past three months:
-Last week, the company proposed to raise Rs 500 crore via private bonds with an interest rate of 8.03% per annum.
-Last month, the company proposed to raise Rs 2000 crore by issuing private bonds which offers 8.04% as interest per annum.
-The same month, Idea proposed to raise Rs 500 crore by way of private bonds with an interest rate of 7.77%.
-In the same month, it issued another proposal to raise Rs 1,500 crore via private bonds with an interest rate of 7.57%.
-In December last year, Idea issued unsecured redeemable NCDs worth Rs 1,500 crore with a 7.57% interest rate in the NSE.

The company’s consecutive bonds issues come after it revealed plans to upgrade all of its 17 service areas to 3G and/or 4G by March 2017. It is also reportedly in talks with Vodafone Group for a potential merger deal. Note that earlier, Idea had categorically denied reports of it being in discussions with Vodafone, in a notification with the stock exchange.

For the quarter ended September 2016 (Q2 FY17), Idea’s:
– Gross revenue stood at Rs 9,300 crore, a decrease of 1.96% from Rs 8,791.5 crore from the preceding quarter.
–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.
–Mobile data revenue contribution was at 21.9% of service revenue in Q2 FY17.
— 3.073 million 4G customers, up 70.72% from 1.8 million subscribers in the preceding quarter.

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