Idea Cellular to now raise Rs 1000 crore via NCDs to fund 4G expansion in India

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Idea Cellular on Monday informed the stock exchange that it is planning to raise Rs 1,000 crore from the market via issuance of unsecured Redeemable Non-Convertible Debentures (“NCDs”). The telco had last month raised Rs 1,500 crore through the same route.

The NCDs are proposed to be listed on NSE for tenure of 5 years, the telecom operator said in its filing. "The deemed date of allotment is January 4, 2017 and the date of maturity is set as January 4, 2022. The coupon/interest offered is 7.77 per cent per annum," it said.

NCDs are typically long-term financial instruments that acknowledge a debt obligation towards the issuer. They, however, do not convert into equity shares.

The country’s third largest telecom operator by subscribers is likely to use these funds to support its 4G expansion strategy in the country. It bought additional 2x74.6 MHz spectrum in FDD technology on 1800 and 2100 bands, and 200 MHz of capacity spectrum in TDD technology on 2300 and 2500 bands in the recent spectrum auctions.

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Idea Cellular earlier said that it will expand 4G services to nine circles to take their wireless broadband footprint to 20 circles by March 2017 . It plans to add nearly 57,000 sites this year to enable the launch of 4G in circles of UP West, UP East, Gujarat, Mumbai, Bihar, Rajasthan, West Bengal, Assam and Jammu & Kashmir where spectrum was acquired in the auctions ended last month.

Idea’s 4G footprint, by the end of this year, will cover our key 20 circles contributing 94% of the company revenue and 90% of industry revenue, Himanshu Kapania, managing director, Idea Cellular, said.

Currently, Idea’s wireless broadband network is spread across 17 circles. The company plans to achieve a network of nearly 250,000 sites and optical fibre network of 1.41 lakh km this financial year.

The telecom operator is planning to launch its Idea branded games in the current quarter and ‘Idea Movies & Music Services’ in future. It also plans to introduce live TV, digital magazines and newspaper subscription, video and audio chat, rich messaging and Voice over IP services in the next financial year.

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