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Corporate

Corporate news, corporate developments and various announcements by corporates. Under this we also bring you regulatory developments of corporates and track their financial results including the quarterly as well as annual results. Besides, hiring and appointments by various corporates and enterprises are also featured in this section.

Results

Jio Posts Profit Of Rs 504 crore in Q3, Revenue Up 12%

mukesh ambani jio

Reliance Jio is the happiest kid in the block. When all other telecom operators in India are posting huge dip in their top-line as well as bottom line, Jio is standing tall amongst giants, with registering its first-ever profit in the second quarter of its business.

In Q3 ended December 2017, the 4G operator posted net profit of Rs 504 crore ass against Rs 271 crore loss in the previous quarter. This is a big boost for Jio, India’s newest telecom operator with all 4G services.

In terms of revenue, the operator pocketed Rs 6879 crore in December quarter compared to Rs 6147 crore in the previous quarter registering a growth of 11.9%. Standalone EBITDA of the Mukesh Ambani-led firm stood at Rs 2628 crore, an 82.1% growth over previous quarter and EBITDA margin for December quarter stood at 38.2%.

“Jio’s strong financial result reflects the fundamental strength of the business, significant efficiencies and right strategic initiatives. Jio has demonstrated that it can sustain its strong financial performance,” said Mukesh Ambani, Chairman and MD of Reliance Industries.

Also Read : Airtel Q3 Profit Dips By 39%

By the end of December 31, the company said, its customer base touched 160.1 million. Its a record. No other service provider has captured this number of customers in such short span. In the reported quarter itself the company added 27.8 million new customers. In the trailing quarter i.e October, net subscriber addition was 19.5 million.

If one deducts the customers who moved out of Jio in this quarter, the net addition stands at 21.5 million in December quarter as against 15.3 million in the previous quarter. The company says its customer churn is lowest in the industry – at 1.4%.

Jio’s quarterly results also shows that its ARPU for the period stood at Rs 154 and the total data consumed on it’s network is recorded at 431 crore GB.

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Results

Airtel Results : Revenue Down by 13%, Profit By 39%

airtel-results

Country’s largest operator Bharti Airtel today announced its financial results for third quarter ended December 2017 and it is no different than its results for past few quarters – a steady decline, which the company attributes to the prevailing market conditions and the reduction in IUC.

The Q3 results show Airtel’s consolidated revenue, that includes earnings of its India, South Asia and Africa businesses, decreased by 12.9% to clock Rs 20,319 crore as against Rs 23,336 crore for the same period a year ago. If we look at the company’s earnings for last nine months i.e from April to December, there’s a similar decline ass well. Revenue of Airtel in last nine months ended December 2017 reached Rs 64,054 crore as against Rs 73,534 crore by December 2016, showing a dip of 12.9%.

Airtel results also shows that the company’s net profit is also in a constant decline. In the past quarter ended December 2017, the company posted net profit of Rs 306 crore as against Rs 504 crore in the same period in the previous fiscal, showing huge drop of 39.3%.

Also Read: Bharti Airtel Results for Q2 , 2018

The company’s CEO for India and South Asia, Gopal Vittal, attributed this decline to the recent cut in IUC. He is also worried the situation would worsen further as TRAI has also reduced the international call termination charges.

“Regulatory fiat in the form of a cut in domestic IUC rates has exacerbated the industry ARPU decline in Q3’18. The recent announcement of reduction in International termination rates will further accentuate this decline and benefit foreign operators with no commensurate benefit to customers,” Vittal said.

Airtel results also shows that the company’s India revenue has dipped by 15% to clock Rs 15,294 crore in the December quarter of 2017 compared to Rs 18,012 crore for the same period a year ago. On nine months term, Airtel has garnered revenues of Rs 49,266 crore by December 2017 compared to Rs 56,386 crore by December 2016 showing a drop of 13%.

 

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Results

Bharti Infratel’s Revenue Up By 7%, Profit Dips by 6%

bharti-infratel-results

Airtel’s tower arm Bharti Infratel’s posted a revenue growth of 7% in December quarter of 2017 as compared to the same period of 2016. However, the firm’s net profit saw a drop of 6% in the reported period largely because of growing consolidation in the market which is leading to reduction of co-location sites of operators.

In the reported quarter – December 2017, Bharti Infratel posted revenues of Rs 3665 crore compared to Rs 3401 crore in the same period in 2016. In the nine month period ended in December 2017 the tower company’s total revenue reached Rs 10,827 crore as against Rs 9903 crore by December 2016, showing a growth of 9%.

Net profit, however, saw a dip in this quarter. In October-December quarter of 2017, the net profit of Bharti Infratel is registered at Rs 585 crore, declining 6%, from Rs 620 crore in the same period in 2016. This is primarily because of the reduction in number of co-location sites for the tower firm.

“We are all aware that the Indian telecom industry is transforming with unprecedented consolidation. Inevitably and as anticipated, we saw exits of co-locations from such consolidating operators this quarter. While there would be more exits on this account in coming few quarters, we expect the overall long-term impact to be positive due to expected accelerated step-up of nationwide 4G rollouts by remaining operators. With our reach, financial strength and operational expertise, we are in the best position to capture what we believe is a big potential for our industry based on exciting data-based demand,” said Akhil Gupta, Chairman, Bharti Infratel.

Co-location sites are sites where a tower company hosts multiple operators on a single structure. This is reducing as the Indian telecom industry is witnessing massive restructuring and mergers in recent days, mostly after the entry of Reliance Jio.

Bharti Airtel, so-far the largest operator in the country, is acquiring or merging with Tata Teleservices, Telenor and Tikona. The next two big operators – Idea and Vodafone – are merging with each other in order to survive in the industry, and RCom has already closed its shop and in the process of selling off its infrastructure including spectrum to Reliance Jio. The Indian telecom industry, once a 12-operator strong, is now reducing to 3 or 4 operators in next coupe of quarters.

The co-location sites of Bharti Infratel in this quarter reduced by 6612 to reach 213476. At the end of the reported quarter, the tower company’s total tower strength was 91007 which includes itts share in Indus Towers.

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M&A

NEC Acquires UK-based IT Services Firm NPS

NEC Head Office

NEC has announced the acquisition of UK-based IT services company Northgate Public Services Limited (NPS),  for GBP 475 million from leading international private equity firm Cinven. This acquisition is expected to be completed by the end of January 2018.

Established in 1969, Northgate Public Services develops software and services for the public sector, mainly in the UK, and employs approximately 1,400 software engineers throughout the UK and India. NPS works closely with the British police and government organizations to deploy its business platform across a broad client base that includes local police forces, tax collection offices, social security offices and housing authorities.

NEC’s international safety business capitalizes on biometrics technologies, including face recognition and fingerprint recognition technologies that have been evaluated as the world’s most accurate, and provides identification systems to more than 30% of state police forces in the United States.

NEC’s proven track record of providing more than 700 systems in over 70 countries around the world, mainly in areas such as identification and immigration control, has contributed to the realization of safer and more secure communities.

In the future, NEC aims to leverage artificial intelligence (AI) to quickly detect fraudulent requests or applications across its public institutions client base and will seek to provide innovative solutions that create social value. In the UK in particular, NEC sees significant opportunity related to the government’s promotion of a digital strategy focused on administrative service improvement and cost reduction through visualization of administrative costs and bringing services online.

“We are proud to have Northgate Public Services, one of the UK’s leading technology companies, joining the NEC Group,” said Takashi Niino, President and CEO, NEC Corporation. “With this acquisition, NEC aims to support and strengthen NPS’ technologies for police operations, establish new safety solutions based on a common business platform, and to further develop international markets largely focused on countries within the Commonwealth.”

“This is a very exciting time to be part of Northgate Public Services. Our colleagues and leadership team have worked incredibly hard over the past two years to get the Company into great shape operationally and financially, with the result that NPS is a highly attractive asset to NEC. This transaction represents a step-change in our ability to serve our clients,” said Stephen Callaghan, CEO, Northgate Public Services.

“Combined with NEC’s business, we will now be able to offer a wider suite of services and software to our existing client base, whilst also expanding in new geographies and technology sectors. I’d like to stress that we see this as simply the beginning of our next phase of development. The increased financial strength, technical capability and market access support NEC provides will allow us to accelerate our growth plans considerably and I am enthusiastic about our future prospects.”

Following the acquisition, NEC and NPS will collaborate to develop and provide safety solutions that combine solutions and technologies from both companies. Specifically, the companies will take advantage of NEC’s biometrics technology to enhance identity authentication during police operations and administrative procedures, in addition to utilizing NEC’s line-up of cutting-edge AI technologies, “NEC the WISE,” to detect social security fraud and ensure benefits are properly distributed. The companies will capitalize on real-time detection of suspicious individuals and abnormalities using NEC face recognition, intrusion detection, suspicious item detection and other image analysis techniques. NEC will also promote NPS’ solutions for police operations and public housing management solutions to markets outside the UK.

NEC focuses on the provision of social solutions and is strengthening the safety business as a key pillar in its growth strategy. Going forward, NEC will continue to develop core technologies and solutions while acquiring new clients, delivery resources, core technologies and business models through M&A and other business collaboration models. These measures are expected to contribute to the expansion of the social solutions business and improve profitability centered on the safety business.

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AnnouncementsNews

Idea Cellular To Raise Rs 6750 Cr. Via Preferential Shares

Aditya-Birla-Idea-Cellular

Idea Cellular, which is in the middle of a merger with Vodafone India, Thursday said that its board has approved raising Rs 3250 crore through issue of equity shares on preferential basis to its promoters. The company would issue 326.6 million shares in this manner at a price of Rs 99.50 per share to promoters including Birla TMT Holdings Private Limited / Elaine Investments Pte. Ltd. (Singapore) / Oriana Investments Pte. Ltd. (Singapore) / Surya Kiran Investments Pte. Ltd. (Singapore).

“The issue is expected to complete by early February, 2018, post which the shareholding of Promoter group in Idea will increase to approximately 47.2% from existing level of 42.4%,” the company said in a statement.

The company also said that its board has also constituted a committee of Board members to evaluate potential routes for raising further capital of up to Rs. 3500 crore including, among others, further Preferential Issue, Qualified Institutional Placement (QIP), Rights Issue.

“The fund raising plan of Rs 3,250 cr with an enabling resolution to raise Rs 3,250 cr will definitely aid idea cellular in terms of deal apprising in their balance sheet. The move was also necessitated by the fact that idea needed to ramp up its product offerings and at the same time strengthen its infrastructure requirements,” says Mayuresh Joshi, Fund Manager, Angel Broking.

The proposed capital raising along with recent announcement of Idea’s standalone towers sale to ATC and the potential monetization of Idea’s 11.15% stake in Indus Towers, will augment the long term capital resources of the Company.

“The Aditya Birla Group remains committed towards the telecom business. The group is in the process of creating a large digital infrastructure and to contribute significantly towards fulfilment of the ‘Digital India’ vision of the Hon’ble Prime Minister. At a time when the telecom industry is going through a challenging environment, this equity infusion by the Group in Idea is another step towards reinforcing the group’s commitment,” said Kumar Mangalam Birla, Chairman, Idea Cellular.

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M&ANews

Reliance Jio Acquires RCom’s Spectrum And Other Assets

mukesh ambani jio

As expected, big brother Mukesh Ambani’s Reliance Jio emerged as the highest bidder to acquire wireless infrastructure assets of RCom, younger brother Anil Ambani’s recently shut-down mobile services business. Both the companies today announced the development.

“Reliance Jio emerged as the highest bidder in a transparent process conducted under the supervision of a high-powered Bid Evaluation Committee, comprising experts from banking, telecom and law,” RCom said in a statement.

Value of the assets that were up for sale was not disclosed nor the amount for what Jio acquired RCom’s infrastructure. However, a day before RCom had announced that the assets sale would help it reduce its debt by Rs 25,000 crore and the company will come out of RBI’s SDR framework.

“All this will happen, the company said, without any or ‘zero’ write-offs to lenders and bondholders, as well as without any conversion of debt to equity,” the company had said then.

The assets that are up for sale include 122.4 MHz of 4G spectrum in the 800/900/1800/2100 MHz bands, over 43,000 towers across the country, 1,78,000 route KM of optic fibre network and 248 media convergence nodes that offer a coverage of 5 million sq ft. Besides these telecom infrastructure, the company is also selling off its real estate properties in New Delhi, Chennai, Kolkata, Jigni and Tirupati.

The Company expects the transactions to close in a phased manner between January and March 2018, subject to lenders’ and other applicable approvals.

The Reliance Jio deal consideration comprises primarily of cash payment and includes transfer of deferred spectrum installments payable to the Department of Telecommunication (DoT). The company will utilise the proceeds of the monetisation of this cash deal solely for pre-payment of debt to its lenders.

RCom has recently closed its wireless business that includes its mobile services. It has then announced to focus on the company’s B2B business. The company said RCOM’s continuing operations will comprise stable and profitable B2B focused businesses, including Indian and Global Enterprise, Internet Data Centres and the largest private submarine cable network in the world. These B2B businesses are stable, capital light and have sustained and predictable annuity revenues and profits, with immense growth potential amidst relatively low competitive intensity.

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AnnouncementsCorporate

RCom to reduce debt By Rs 25,000 Cr From Asset Sale, Exit From RBI SDR Framework

anil ambani

Anil Ambani’s RCom Thursday said it is hopeful to reduce its existing debt by Rs 25,000 crore from its planned asset sale making the total debt reduction by 85%. The company has put up all its assets that includes spectrum, real estate, tower etc for sale and the company had received enough interests from multiple suitors including Reliance Jio.

This reduction of debt, the company claims, is fastest in the industry and was done in just 40 days, a record.

RCom also said the debt reduction will also help it exit from RBI’s strategic debt resolution SDR) framework. All this will happen, the company said, without any or ‘zero’ write-offs to lenders and bondholders, as well as without any conversion of debt to equity.

Ambani who was addressing a news conference this morning also said that his company will pay off the debts in a phased manner between January 2018 to March 2018.

“RCom will receive equity infusion from global strategic partners for further debt reduction, consequent upon a stake sale process already underway, and being conducted by Credit Suisse. RCOM’s balance debt is expected to be a highly conservative ~ Rs. 6,000 crore only, upon completion of all transactions,” the company added.

The assets that are up for sale include 122.4 MHz of 4G spectrum in the 800/900/1800/2100 MHz bands, over 43,000 towers across the country, 1,78,000 route KM of optic fibre network and 248 media convergence nodes that offer a coverage of 5 million sq ft. Besides these telecom infrastructure, the company is also selling off its real estate properties in New Delhi, Chennai, Kolkata, Jigni and Tirupati.

RCom has recently closed its wireless business that includes its mobile services. It has then announced to focus on the company’s B2B business. The company said RCOM’s continuing operations will comprise stable and profitable B2B focused businesses, including Indian and Global Enterprise, Internet Data Centres and the largest private submarine cable network in the world. These B2B businesses are stable, capital light and have sustained and predictable annuity revenues and profits, with immense growth potential amidst relatively low competitive intensity.

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M&ANews

Smartron Acquires Hyderabad based IoT startup MiQasa For Rs 11 Cr

miqasa-smart-switch

Sachin Tendulkar-backed technology firm Smartron on Thursday announced to have acquired MiQasa, a Hyderabad based IoT firm engaged in developing smart products for future smart homes. Though the company has not disclosed the value of the deal, sources in the know said Smartron bought the company for around Rs 11 crore.

The Hyderabad based IoT startup MiQasa that designs and develops range of smart things for home from smart switches, locks, cameras, lights, appliances and controls for home automation. These products, post the acquisition, would now be integrated into Smartron’s IoT platform TronX, and will now be called as tronX things.

Both the companies, Smartron and MiQasa, are based in Hyderabad and are in the business of IoT – developing products and solutions based on Internet of things, for smart homes, smart cities and IoT solutions for enterprises.

“This partnership is in line with Smartron’s vision of building a strong product ecosystem in India and extending the capabilities of the tronX platform to promising startups to showcase their products through a global platform. Both companies are built on strong pillars of ‘designed and engineered in India’ and this synergy will enable them to work together to bring world class products and solutions for home automation in India,” the company said in a statement.

MiQASA, founded in April 2015, has so far designed and produced smart switchboards that are retrofittable to the existing home power systems and has been selling them across India for more than 6 months. They have been working with a number of B2B distributors pan India and have also setup an experience zone in Vijayawada in Andhra Pradesh for live demos with multiple home appliances.

“Smartron was founded with a vision of building a strong product ecosystem in India across IoT verticals ranging from personal to home to health and infrastructure and this association with MiQASA is one more step in that journey,” said Mahesh Lingareddy, Founder and Chairman, Smartron.

This partnership is part of Smartron’s strategy to build and strengthen a strong product ecosystem under tronX which is their unique AI powered IoT platform.

Smartron is developing an IoT platform called tronX which can be integrated with any home or enterprise to make it a smart entity. The firm works with smart product vendors to integrate their products and solutions to its IoT platform so that consumers do not have to invest heavily to transform their ho,es or office in to a smart and connected one.

In the past Smartron had launched two smartphones – T.phone and SRT.Phone – and convertible laptop called t.book.

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M&ANews

Bharti Airtel To Acquire Tigo Rwanda

tigo rwanda

Bharti Airtel today said it has finalised a deal to acquire Tigo Rwanda, the second largest telecom operator in the African country. Airtel has signed an agreement regarding this with Millicom International Cellular, the holding company of Tigo.

Though the financials of this transaction are not disclosed, Airtel said the value for the transaction is based on approximately 6x EBITDA multiple, payable over two years.

“Airtel has taken proactive steps in Africa to consolidate and realign the market structure in the last few remaining countries where its operations are lagging on account of lower market share and presence of too many operators. Airtel and Tigo have already merged their operations to create a strong viable entity in Ghana. Today, it has taken yet another important step to acquire Tigo Rwanda to become a profitable and a strong challenger in a two-player market,” said Bharti Airtel Chairman Sunuil Bharti Mittal.

Tigo is the second largest operator in Rwanda with little over 3 million customers. MTN is the largest operator with more than 60% market share and Airtel is the third largest operator with single digit market share.

“We are also committed to the long term viability of our operations in two other countries i.e. Kenya and Tanzania, to ensure that in 2018 all our 15 operations in Africa start contributing positive margins and cash flows towards a healthy and profitable Airtel Africa,” Mittal added.

In a similar deal, Airtel had merged with Ghana in October this year where both the operators own 50% each in the new merged entity.

The existing customers of Tigo Rwanda will join Airtel’s global network, which currently serves over 370 million customers across 17 countries. The Indian operator said, once merged, Tigo customers will enjoy, amongst other things, benefits of the ‘One Airtel’ network with lower roaming rates across Africa and South Asia, an exciting bouquet of innovative services including Airtel Money.

Raghunath Mandava, MD and CEO, Airtel Africa, said, “The acquisition reinforces our commitment to the Rwanda market and is a significant step towards creating a stronger presence in the country. It will create synergies with our existing business and help boost operational efficiencies in the market. The Rwandan telecom market will significantly benefit from this acquisition, further reiterating our stand that in-market consolidations do not just help achieve better market positions but benefit customers and the industry as a whole.”

On completion, the proposed acquisition will undergo seamless integration, both on the customer as well as the network side, and further strengthen our market position.

Over the years Airtel has been solidifying its market position to become a key player in the continent with in-country acquisitions. In the past, Airtel acquired assets in Uganda (Warid) and Congo B (Warid), Kenya (yu Mobile) and consolidated operations in Ghana (Millicom). The customers in these markets today enjoy a superior and wider network, affordable voice & data services, Airtel Money and better customer care.

With presence across 15 African countries, Airtel is one of the largest telecom service providers across the continent in terms of geographical reach and had close to 83 million customers at the end of quarter ended September 30, 2017.

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M&ANews

Warburg Pincus Buys 20% Stake In Airtel DTH For $350 Mn

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Private equity firm Warburg Pincus has signed a deal with Bharti Airtel to acquire 20% stake in Bharti Telemedia, the DTH business of the company, for $350 million. Of this, 15% stake will be sold by Bharti Airtel and the balance by another Bharti entity which holds 5% stake. Upon closing of the transaction, Airtel will own an 80% equity stake in Bharti Telemedia Limited.

The Airtel board has approved the transaction, which is subject to regulatory approvals. As part of the transaction, Viraj Sawhney, Managing Director, Warburg Pincus India, will join the board of Bharti Telemedia Limited.

With this acquisition, Bharti Telemedia’s valuation goes up to $1.8 billion whereas its revenue was around $550 million for 12 month period ended September 2017.

“Airtel has enjoyed a very successful partnership with Warburg Pincus in the past and we are excited to partner with them once again in an attractive and fast growing space. Airtel TV is very well positioned in the DTH space, and we are committed to grow our share of the market through a combination of innovation, value engineering, customer service and distribution initiatives. We look forward to working with Warburg Pincus towards achieving our vision of making Airtel TV India’s leading DTH platform,” said Gopal Vittal, MD & CEO (India & South Asia), Bharti Airtel.

Vishal Mahadevia, Managing Director and Co-Head, Warburg Pincus India, said, “The Indian Digital TV market is expanding rapidly and we believe that Airtel DTH is well positioned to capitalize on incremental growth in digitization and new TV penetration in Tier 3 and 4 towns and rural areas. We are pleased to be working alongside Sunil Bharti Mittal and the Bharti group again following our successful partnership many years ago, and we look forward to supporting the management team during the next phase of the Company’s growth.”

Airtel TV, the DTH brand of Bharti Airtel, was launched in 2008 and at present is one of the largest paid TV brands. It has approximately 14 million subscribers and with over 1,500 partners and over 158,000 recharge outlets in approximately 630 districts of the country. It is led by Sunil Taldar, who joined as CEO in 2016 and brings over 28 years of experience in the fast-moving consumer goods industry across Asia.

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