Vodafone Idea Ltd.

CARE has assigned ‘AA’ rating to Idea Cellular’s (ICL) proposed Non-Convertible Debentures (NCD) issue aggregating to the worth of Rs 1,000 crore. The rating derives strength from the strong parentage and experienced management of Aditya Birla Group, ICL’s pan-India presence, strong brand recognition of ‘Idea’ in the market, healthy increase in subscriber base over the years, roll out of 3G services and  favorable growth potential for mobile telephony in India.

The rating is, however, constrained by increase in ICL’s borrowing level to fund the capex on acquisition of licenses and deployment cost for launching these services and upgrading the network, highly competitive nature of the industry and regulatory uncertainties surrounding the industry. Idea Cellular is a part of the $40 billion Aditya Birla Group having diversified interest in aluminum, cement, carbon black, textiles etc. The group has a global presence with operations in more than 33 countries across 5 continents.

ICL is one of the major telecom players in the country having presence in all 22 service areas of India. ICL is the third largest wireless operator in India with a revenue market share of 14.9% (as on June 30, 2012). ICL’s subscriber base stood at a healthy 117.2 million as on June 30, 2012.