Indus Towers gains more than 10% as ‘major customer’ is raising funds
Debt ridden telecom operator, Vodafone (LON: VOD ) Idea’s shares gained 6.87% in the past two days and were trading at ₹ 7.00 apiece at 02:42 PM on Tuesday, ahead of its board meeting to consider the preferential issue of optionally convertible debentures (OCDs) to ATC Telecom Infrastructure Pvt. Ltd. In addition, the board will arrange an Extraordinary General Meeting (EGM) to seek approval of the shareholders in this regard.
Earlier, the company had informed the bourses the shareholder resolution on November 21, 2022, approving the preferential issue of OCDs to ATC Telecom had lapsed as the OCDs could not be issued within the prescribed period of 15 days from approval. According to the rules, a fresh approval was required.
Meanwhile, the shares of Indus Towers (NS: INUS ) also gained 10.32% in two days and were trading at ₹ 154.45 apiece at 02:45 PM on Tuesday. Vodafone Telecommunications (India) owns a 3.09% stake in Indus Towers. Moreover, Vodafone Idea (NS: VODA ) is a major customer of Indus Towers, and contributes one-third of its total revenue and 68 percent of gross trade receivables.
According to a CNBC report, “Indus Towers can shut down Vodafone Idea’s network since it has not been making timely payments, it does not appear to be a practical idea as there are only three surviving private telcos in the country.”
The company had warned Vodafone Idea in September 2022, that it might have to discontinue its services over pending dues that amounted to nearly ₹ 7,000 crores. As a result, Vodafone Idea sought softer repayment terms, which led to Indus Towers allowing the telecom company to make staggered payments by July 2023 to pay up the pending dues.
Vodafone Idea is suffering from a consistent loss in subscribers. It has lost close to 1 crore subscribers in the past three months. In addition it is also witnessing an exodus of employees. According to a report by the Financial Express, “Around a fifth of its sales team is believed to have quit over the past few weeks.”
Indus Towers is engaged in the business of object of, inter-alia, setting up, operating and maintaining wireless communication towers. It is a large cap company with a market capitalization of ₹ 39,600 crores. It has a good return on equity of 33.52% and an excellent dividend yield of 7.49%.
Written by Simran Bafna
The post Indus Towers gains more than 10% as ‘major customer’ is raising funds appeared first on Trade Brains.
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GOING TO SINK F0R POOR SERVICES. NOT FIT ENOUGH TO COMPETE WITH JIO IN PRESENT SITUATION.Like 0
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