NEW DELHI: Vodafone is setting up a raise to $3-billion (Rs 20,100-crore) equity infusion in its India unit to replace debt as competition boost with the entry of Reliance Jio Infocomm and bidding for spectrum gets underway in less than a month.
Europe’s largest mobile phone operative is also believed to be reviewing the timelines for Vodafone India’s initial public offering, careful of value destruction due to a tariff war unleashed by Jio, people familiar with the situation said.
Overseas market demands make it suitable to replace the debt here with equity as the return on equity is high here & it will trim the debt servicing costs, one of the people said. Vodafone India’s standalone net debt for 2015-16 was around Rs 81,500 crore, according to the company.
Vodafone, based in England, declined to comment precisely on the equity infusion & debt replacement plan, but said the company has consistently invested in India and is today the widest foreign direct investor in the country. It added there’s no change in its IPO timetable. Analysts said Vodafone India can be the most violent bidder in the upcoming auction and some expect it to spend as much as $2 billion on acquiring airwaves.