The Silver Lake deal represents a 12.5% premium to the equity valuation of the Facebook investment into Jio Platforms, a wholly-owned subsidiary of Reliance Industries Ltd (RIL).

Silver Lake’s other investments have included Airbnb, Alibaba, Ant Financial, Alphabet’s Verily and Waymo units, Dell Technologies, Twitter and numerous other global technology leaders.

After selling a 10% stake to Facebook, Reliance had last week said it was in talks with other strategic and financial investors for a similar-sized deal to cut down debt.

RIL chairman and managing director Mukesh Ambani said Silver Lake has an outstanding record of being a valuable partner for leading technology companies globally. “Silver Lake is one of the most respected voices in technology and finance. We are excited to leverage insights from their global technology relationships for the Indian Digital Society’s transformation,” he said.

Silver Lake co-CEO and managing partner Egon Durban described Jio Platforms as one of the world’s most remarkable companies, led by an incredibly strong and entrepreneurial management team who are driving and actualizing a courageous vision. “They have brought extraordinary engineering capabilities to bear on bringing the power of low-cost digital services to a mass consumer and small businesses population. The market potential they are addressing is enormous,” he said.

The deal is subject to regulatory and other customary approvals.

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It has touched an intraday high of Rs 4.09 and an intraday low of Rs 3.60.

Telecom operators Bharti Airtel, Vodafone Idea and Tata Teleservices are likely to make payment for adjusted gross revenue (AGR) dues on Monday to avoid stringent punitive action from the Telecom Department, according to official sources.

The DoT issued fifth and final notice to telecom operators on February 14 for making payment on the same day, but none of the companies paid the dues.

CLSA has maintained sell call on the stock and cut target to Rs 3.50 from Rs 5.50 per share.

Broking house factor in 50 percent of AGR dues risk in its valuation.

It raises FY20-22 forecasts by 2-4 percent as Q3 revenue & EBITDA are ahead of estimates.

The company has received letters from Department of Telecommunications (DoT) directing immediate payment. The company is currently assessing the amount that it will be able to pay to DoT towards the dues calculated based on AGR (Adjusted Gross Revenue), as interpreted by the Hon’ble Supreme Court in its order dated 24 October 2019. The Company proposes to pay the amount so assessed in the next few days, company said in the press release.

According to Motilal Oswal the Supreme Court order leaves telecom companies with limited options to get relief from legal or government sources.

A duopoly market will likely to benefit Bharti Airtel and raises target to Rs 650 per share.

The incremental EBITDA potential for Bharti Airtel is at Rs 10,000 crore in FY22 and it can garner EBITDA of Rs 55,000 crore in FY22, without factoring any further ARPU increase.

Vodafone Idea’s debt burden is high, while Bharti better placed to make payments as it may continue to gain market share at an accelerated pace, said Axis Capital.

For Vodafone Idea, it’s tough to remain a going concern if there’s no change in order, while there is limited room for any change in decision either by government or any other SC bench, it added.

ICICIdirect believes that given Vodafone’s weak balance sheet and promoters’ earlier statement of their inability to infuse capital, the company is more likely to file for bankruptcy than meet the demand for the dues.

It has suspend the rating on Vodafone Idea, given this development.

It has reiterated that Bharti Airtel remains the preferred pick in the telecom space given its resilient performance amid challenging times with improving market share and relatively stronger balance sheet to weather the challenges.

At 09:32 hrs, Vodafone Idea Limited was quoting at Rs 3.84, up Rs 0.40, or 11.63 percent on the BSE.

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Bharti Airtel on Friday said its name has been removed from the Directorate General of Foreign Trade’s (DGFT) ‘denied entry list’, and the operator is working with authorities to complete pending formalities.

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Mittal also said the telecom regulator needs to urgently intervene to fix a floor price for tariffs. This, he said, is required for the average revenue per user (ARPU) to rise to Rs 200 initially, and to Rs 300 over time, for the industry to be healthy and sustainable.

“The situation is dire — it is a matter of survival for everyone. Vodafone (Idea) is in losses, Airtel is in losses, (state-owned) BSNL (Bharat Sanchar Nigam Ltd) is in losses,” Mittal said.

“We are in a better situation—we have now decided to raise funds,” Mittal said. “However, if you have to go in for network expansion, invest in newer technologies, bid for 5G spectrum and then build a 5G ecosystem which India deserves, then industry needs to be viable.”

Referring to the Bharti Airtel statement in the fiscal second quarter regarding concerns about viability if it couldn’t raise money on its terms in the face of the AGR dues, Mittal said, “That is an accounting standard They (auditor Deloitte) called it out. It isn’t my interpretation or view of the company… It is a standard and that is why we are in the market to raise money.”

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Department of Telecommunication will give an option to the Telecom Service Providers (TSPs) to defer payment of the spectrum auction instalments due for 2020-21 & 2021-22, either for one or both years.  These deferred amounts bill be spread equally in the remaining instalments to be paid by TSPs. Interest as stipulated while auctioning of the concerned spectrum will however be charged so that NPV is protected.

The government will defer spectrum payments due from telecommunications companies for two years to help an industry ravaged by a years-long price war, mounting debt and a court decision last month demanding $13 billion in overdue fees.The moratorium will be for two years beginning April 2020.

Deferment of spectrum auction instalments will ease the cash outflow of the stressed TSPs and facilitate payment of statutory liabilities and interest on bank loans.  Continued operation by TSPs will give a fillip to employment and economic growth.  Improved financial health of TSPs will facilitate maintenance of quality of services to consumer.

The decision for deferring spectrum payment instalments for two years will be implemented within a fortnight.  Amendment to the License shall be issued expeditiously with the approval of Hon’ble Minister of Communications.

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