Indian promoters' shareholding in telcos declines: TRAI study

The share of Indian promoters in the total shareholding of major telecom access providing companies declined by almost one-third over five years from 2007-08 to 2011-12, says a study paper released by the Telecom Regulatory Authority of India (TRAI) here Wednesday.

While in 2007-08, the share of Indian promoters in the total shareholding of major telecom access providing companies was 59.77 percent, it declined to 40.42 percent in 2011-12, the study paper said.

Foreign promoters increased their stake or purchased the stake of Indian promoters in telecom companies such as Aircel, Unitech, Sistema Shyam, Bharti Airtel and Vodafone.

The share of Indian promoters in the equity shareholding declined from 59.70 percent in 2007-08 to 56.63 percent in 2011-12. Unitech, Tata and Vodafone are among the telecom companies whose Indian promoters' equity shareholding has declined.

The share of foreign promoters in the equity shareholding increased from 5.30 percent in 2007-08 to 13.90 percent in 2011-12. In Bharti, Unitech, Tata, Sistema Shyam, Loop and Vodafone, the stake of foreign promoters in equity shareholding has increased.

The shareholding of Indian institutions in equity shareholding in the telecom sector has gone up from Rs.376 crore in 2007-08 to Rs.646 crore in 2011-12, while the shareholding of foreign corporates in equity shareholding has gone up from Rs.19 crore in 2007-08 to Rs.1,252 crore in 2011-12, the study said.

Long-term loans have increased from Rs.38,698 crore in 2007-08 to Rs.116,860 crore in 2011-12, an overall compound annual growth rate of 31.82 percent over the last five years. This is primarily due to the long-term funds requirement for investment in 3G/BWA spectrum and for expansion of networks.

The quantum of foreign currency loan has gone up from Rs.13,929 crore in 2007-08 to Rs.40,045 crore in 2011-12. The increase in foreign currency loans in 2008-09 over the previous year is mainly due to borrowings by Reliance Communications and Idea Cellular. Reliance, Tata, Bharti Airtel and Idea have the major share (88 percent) in foreign currency loans or bonds outstanding at the end of 2011-12, the TRAI study said.