THE COMPANY

Vodafone Idea Limited is an Indian telecom operator with it headquarter

based in Mumbai, Maharashtra. It is now called as TURBONET 4G, a
superior network throughout India. Vodafone Idea is a pan-India
integrated GSM operator offering 2G, 3G and 4G VoLTE mobile services
under two brands named Vodafone and Idea. Vodafone Idea also
provides services including Mobile payments, IoT, enterprise offerings
and entertainment, accessible via both digital channels as well as on-
ground touch points, centres across the country. As of July 2019,
Vodafone Idea has a subscriber base of 380 million, making it
the second largest mobile telecommunication network in India and sixth
largest mobile telecommunications network in the world. Vodafone Idea
has a broadband network of 340,000 sites, distribution reach of 1.7
million retail outlets.
On 31 August 2018, Vodafone India merged with Idea Cellular, and was
renamed as Vodafone Idea Limited. However, the merged entity
continues using both the Idea and Vodafone brand. Currently, the
Vodafone Group holds a 45.1% stake in the combined entity, the Aditya
Birla Group holds 26% and the remaining shares will be held by the
public. Kumar Mangalam Birla heads the merged company as the
Chairman and Balesh Sharma used to be the CEO. After a plunge in
share price of Vodafone Idea by 80% on NSE, Balesh Sharma resigned
citing personal reasons. Ravinder Takkar, Ex-CEO of Vodafone
Romania and the key deal negotiator from Vodafone has taken over the
reigns as CEO.
Management Discussion & Analysis
Another challenging quarter with sustained rate pressure, explosive volume growth
maintained
During Q1FY19, Indian mobile industry continued to decline under pressure from heavily
discounted unlimited voice and bundled data plans & subsidised 4G feature phone offerings
from one of the operator, forcing commensurate response from other existing mobile
operators to retain subscribers. The sector presently offers ‘Voice & Data’ unlimited bundles
at unsustainable below cost price levels impacting the financials of all incumbent operators.
As existing customers continue to prefer lower value deep discounted unlimited voice and
bundled data plans, the ‘Average Revenue Per User’ (ARPU) remained under pressure.
The revenue for the quarter declined to Rs. 58,892 million in Q1FY19, as against Rs. 61,373
million in Q4FY18 mainly on account of down trending of ARPU, representing a normalised
decline of 2.9% QoQ, after adjusting for impact of exclusion of one month tower revenue (on
completion of sale transaction of Idea standalone towers to ATC on May 31, 2018) and full
quarter impact of TRAI directed International IUC rate reduction (vs. 2 months impact in last
quarter). The EBITDA for the quarter stands at Rs. 6,595 million. The ARPU for the quarter
is Rs. 100 as against Rs. 105 in Q4FY18. Idea’s VLR subscribers as on June 30, 2018 stands
at 203.4 million with a market share of 20.9% (May 2018), an improvement of 1.4%
compared to May 2017.
The increasing adoption of unlimited voice and bundled data plans continued to drive
significant volume consumption of mobile voice and broadband data. The quarterly voice
minutes at 349.5 billion, grew at a staggering rate of 39.4% vs. 250.7 billion minutes in
Q1FY18. The monthly voice consumption (per user) has risen exponentially to 609 minutes
from 441 minutes per months in Q1FY18.
Similarly, broadband data usage per broadband data subscriber has risen sharply to monthly
usage of 8GB in Q1FY19, compared to 3GB per month a year back. In Q1FY19, the
broadband data volumes reached record level of 992 billion MB, more than 4 times compared
to mobile broadband data volumes a year back. The company’s wireless broadband
subscriber (EoP) base now stands at ~41 million, an addition of 14.6 million broadband data
customers over last one year. During the quarter, Idea completed the rollout of Voice over
LTE (VoLTE) services across 20 – 4G Telecom Circles. With the merger round the corner,
the 4G network rollout was muted during the quarter but expected to gather momentum in the
remaining three quarters.
Share Holding Pattern:
Shareholders -
Holding % 2018-19 2017-18 2016-17 2015-16 2014-15
Promoters 71.57 42.56 42.39 42.23 42.24
MF 5.88 7.46 3.39 2.26 1.77
FII 15.67 26 25.92 25.68 24.07
Other Institutions 1.26 4.51 5.36 4.2 3.59
Individual 5.61 19.46 22.94 25.63 28.34
Others 0.01 0.01 NIL NIL NIL

Grand Total 100% 100% 100% 100% 100%

Promoter Holding - June 2019

Total Shares
Shareholders (CR) In %
Kumar Mangalam Birla 8,64,906 0
Grasim Industries Limited 3,31,75,66,167 11.6
EURO PACIFIC SECURITIES LTD 3,19,89,86,106 11.1
VODAFONE TELECOMMUNICATIONS (INDIA) LIMITED 1,62,45,11,788 5.65
HINDALCO INDUSTRIES LIMITED 75,11,19,164 2.61
Omega Telecom Holdings Private Limited 7,66,87,227 0.27
CCII (Mauritius) Inc 44,60,59,752 1.55
ORIANA INVESTMENTS PTE LTD 2,14,73,07,225 7.47
Jaykay Finholding (India) Private Limited 75,92,136 0.03
Usha Martin Telematics Limited 9,11,23,113 0.32
Trans Crystal Ltd 1,46,11,43,311 5.08
ELAINE INVESTMENTS PTE LTD 86,11,28,643 3
BIRLA TMT HOLDINGS PRIVATE LIMITED 35,37,98,538 1.23
PILANI INVESTMENT AND INDUSTRIES CORPORATION LIMITED 3,02,78,530 0.11
 Mobilvest 1,67,59,94,466 5.83
PRIME METALS LTD 2,18,55,26,081 7.61
Telecom Investments India Private Limited 19,47,38,421 0.68
Igh Holdings Private Limited 34,96,23,009 1.22
ASIAN TELECOMMUNICATIONS INVESTMENTS (MAURITIUS)
98,04,69,868 3.41
LIMITED
AL-AMIN INVESTMENTS LTD 81,27,44,186 2.83
Grand Total 20,56,72,62,637 71.6
The shareholding patterns of clearly states the majority share are with promoters
which are 71%.
The others involvement is very low, the public percentage revolve around 0.01%.

AUDITOR’S REPORT
Independent Auditor’s Report

They have audited the accompanying standalone Ind AS financial statements of

Vodafone Idea Limited (formerly known as Idea Cellular Limited) which comprises
the Balance sheet as at March 31, 2019, the statement of Profit and Loss, including
the statement of other comprehensive Income, the Cash Flow Statement and the
Statement of change in Equity for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies and other
explanatory information.

According to the explanations given to them, the aforesaid standalone Ind AS

financial statements give the information required by the companies Act 3012, as
amended in the manner so required by a true and fair view in conformity with the
accounting principles generally accepted in India, of the state affairs of the company
a at 31st March, 2019, its loss including other comprehensive income its cash flows
and the change in equity for the year ended on the date.

Inventory Valuation:
Inventories are valued at lower of cost and net realisable value, including necessary
provision for obsolescence. Cost is determined using the “Weighted Average
Method”.

Depreciation Method:

The Company depreciates property, plant and equipment over the estimated useful
life on a “Straight-Line Method” basis from the date the assets are available for use.
Depreciation on fixed assets is provided on straight line method (except stated
otherwise) on the basis of estimated useful economic lives.

Capital and Value Creation:

1. Financial Capital: Financial capital serves as a medium of exchange that can

obtain value through conversion into other forms of capitals
 2. Human Capital It is people’s ability, experience and innovation that contribute to
the organisation to get its goals and value.
3. Intellectual Capital It is knowledge based, intellectual capitals includes like
patents, copyrights, software, rights and licences.
4. Social & Relationship Capital The relationship between company and public
within the organisation or outside the organisation. The ability to share information to
enhance individual and collective well-being such as customers, investors and
suppliers.

Liquidity Ratio:

Liquidity Ratio
  Mar 19 March-18 Mar-17 March-16
Current Ratio 0.34 0.94 0.45 0.29
Quick Ratio 0.34 0.94 0.44 0.28
Cash Ratio 0.018 0.003 0.005 0.049

Profitability Ratio:

Profitability Analysis
  Mar 19 March-18 Mar-17 March-16
Profit Margin(PAT/Total Revenue) -39.13% -15.68% -2.29% 6.38%
RoA(PAT/Avg Total Asset) -9.0% -4.6% -0.9% 3.3%
RoE(PAT/Avg Share Holder Fund) -34.1% -17.3% -3.4% 9.9%
EPS -21 -11 -1 7
Asset TO(Sales/Avg Total Asset) 0.23 0.29 0.41 0.51
EBIDTA 32,908.00 25,760.58 32,698.68 32,895.18
EBIDTA margin 88.93% 91.20% 91.97% 91.59%

Profitability
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%
March-16 Mar-17 March-18 Mar 19
-20.00%
-40.00%
-60.00%

Profit Margin(PAT/Total Revenue) RoA(PAT/Avg Total Asset)

RoE(PAT/Avg Share Holder Fund) EBIDTA margin

Solvency Ratio:
 Solvency Ratio
  Mar 19 March-18 Mar-17 March-16
Debt/Equity(Long Term Debt/Share holder Fund) 1.9423 2.2186 2.2202 1.7404
Liability/Equity(Total Liability/Share holder fund) 2.852 2.616 2.910 2.402
Intrest Coverage Ratio(EBIDTA/Intrest) 3.48 5.35 8.22 18.49
Leverage Ratio(Average Asset/Average Shareholder fund) 3.78 3.76 3.66 3.02