BTVL'S
RATING ON PAR WITH INDIA'S SOVEREIGN
Standard & Poor's (S&P) has rated Bharti Tele-ventures
equivalent to the sovereign rating assigned to India, the highest
that any Indian corporate has been assigned in the foreign currency
category. Significantly, Bharti has been planning an international
listing for some time and the internal process for the overseas
float is believed to be underway.
"This is a
vote of confidence on the growth potential of the telecom
industry in India and Bharti's ability to exploit this potential
and be one of the strongest and leading players in the market,"
says Akhil Gupta, joint managing director, Bharti Tele-ventures
(BTVL). Asserting that this is the highest rating in foreign
currency category, he adds that this rating has put Bharti
in the league of select Indian companies like Reliance Industries,
Indian Oil Corporation and Tata Motors.
S&P's ratings
service has assigned its 'BB' corporate credit to Bharti based
on its customer base in the wireless sector, improving profitability
and cash flow measures.
S&P expects
the company's customer growth to remain strong in the near
to medium term given the considerable growth potential in
the domestic customer base and also expects the company to
maintain its market position amid increasing competition.
These strengths are, however, partly offset by the company's
aggressive expansion plan, intense competition, and regulatory
uncertainty in India's telecom sector, according to S&P.
S&P rating
(BB stable) factors in the established customer base of Bharti
as the second-largest wireless operator in India, with a marketshare
of above 20%. Bharti's subscribers have grown at a compounded
annual growth rate of 121% in 1999-2004 to 6.5 million mobile
subscribers, supported by its strong brand value, extensive
coverage and integrated service offerings, says the company.
S&P rating
also factors the profitability and cash flow measures as well
as adequate liquidity of the company. Bharti's Rs 100-crore
cash balance, Rs 1000 crore undrawn committed credit facilities
(excluding export creditor loans), and Rs 400-crore short-term
investments are more than sufficient to cover almost Rs 1,000
crore in debt repayment due by fiscal 2005, asserts Bharti.
Bharti is the largest
GSM mobile service provider in India with about 7.7 million
customers till last month consisting of over 7 million mobile
subscribers. It offers mobile services in sixteen out of 23
circles and provides fixed line services in five circles.
