IJCRT2203056

www.ijcrt.
org © 2022 IJCRT | Volume 10, Issue 3 March 2022 | ISSN: 2320-2882
“VODAFONE AND IDEA: AN ANALYSIS OF

FINANCIAL IMPACT OF MERGER”
Dr. AASHKA THAKKAR, RAHULKUMAR R. JADAV, HETAL M. KACHCHHAVA HOD FMS MBA
MBA FINAL YEAR STUDENT MBA FINAL YEAR STUDENT
PARUL UNIVERSITY FAULTY OF MANAGEMENT STUDIES.
Abstract: - This merger did not only create a telecom giant but has had wide-ranging implications for
the industry, services, the staff, and consumers as well as it pushed more merger moves in the telecom
sector. In this paper, the current scenario of the Indian telecom market is also analyzed to understand
where Vodafone-Idea stands today. Vodafone and Idea announced their merger in 2017, which made a
huge impact in the Indian telecom sector. This was a major consequence of Jio’s cruising dominance in
the industry which backed other major players to take precarious steps to maintain their stand in the
Indian telecom market. Vodafone India was the second-largest player of the Indian Telecom Industry
in terms of subscriber base while Idea Cellular Limited has the third largest subscriber base in India.
Idea Cellular was a subsidiary of Aditya Birla Group. This research work focuses on the merger deal
which happened between Telecommunication companies Idea cellular and Vodafone India. The deal
was officially announced on 20th March 2017 for total of$23 billion.
Key words: VODAFONE, IDEA, MERGER, POST-MERGER ANALYSIS OF FINANCIAL
STATEMENTS.
1. INTRODUCTION
In a general sense, mergers and acquisitions are very similar corporate actions - they combine two
previously separate firms into a single legal entity. Significant operational advantages can be obtained
when two firms are combined and, in fact, the goal of most mergers and acquisitions is to improve
company performance and shareholder value over the long-term. Indian telecom sector has witnessed a
significant growth and emerged as a noteworthy performer in the service sector and at the same time,
Indian Industries have grown tremendously and many strategic alliances has taken place in India.
Recently, Telecom sector is considered as the most volatile sector in the country even though there are
many mobile users in India. Vodafone India is a 100% subsidiary of Vodafone Group. It commenced
operations in 1994 when its predecessor Hutchison Telecom acquired the cellular license for Mumbai.
Brand Vodafone was launched in India in September 2007, after Vodafone Plc. acquired a majority
stake in Hutchinson Essar in May 2007. From a single operation base with 31 million customers, the
company has expanded its operations across the country to cover all 22 telecom circles and service 210
million customers. Idea Cellular is an Aditya Birla Group Company, India's first truly multinational
corporation. Idea is a pan-India integrated wireless broadband operator offering 2G, 3G and 4G services,
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www.ijcrt.org © 2022 IJCRT | Volume 10, Issue 3 March 2022 | ISSN: 2320-2882
and has its own NLD and ILD operations, and ISP license. Idea is one of the top three mobile operators
in India, with annual revenue in excess of USD 5 billion and a revenue market share of 19%. With
nearly 200 million subscribers, Idea ranks sixth in the global rankings of operators in subscriber terms,
for single country operations. Mergers involve the mutual decision of two companies to combine &
become one entity. The combined business can cut cost of operation & increase profit which will boost
shareholders value for both groups of shareholders.
2. LITERATURE REVIEW
Krishna murti and Vishwanath, (2010): There is a need to develop practical measures for analyzing the
performance of a merged company as the frequency, Value, Numbers of Mergers & Acquisitions in
India are increasing continuously.
Dasgupta (2004): Reforms mainly economic reforms is the most important factor in the growth of
mergers in India as most of the mergers are results of economic reforms initiated since 1990s.
G. Coontz (2004): Conducted a study on ‘Economic Impact of Corporate Mergers and Acquisitions on
Acquiring Firm Shareholder’. The researcher concluded that companies are not able to perform better
after Mergers and Acquisitions (M&A) in every aspect. The observed performance varies from
industry to industry. The performance is solely dependent on the type of industry in which Mergers and
Acquisitions (M&A) take place.
Liargovas (2011): Examined the Greek Bank post-Mergers financial performance of 1996-2008. To
conduct the study, secondary information was collected from the information of Athens securities
market, daily bulletin, printed annual money reports. Normal least multivariate analysis, t test was
applied in the study.
Vermilion& Rau (1988): Depicted the results after Mergers and Acquisitions of companies. Authors
found that after 3 years of Mergers and Acquisitions (M&A) the acquiring firms are under
performance. On the other hand, if anyone is looking for the long-term performance of Mergers and
Acquisitions (M&A), it is observed that it is not uniform across the firms.
Ms. Aastha Dewan (2007): Focused on the post-merger financial performance of the acquirer
companies in India and performance of firms going through mergers in Indian industry. The merger
cases for the year 2003 have been taken for the analysis. The financial data has been collected for six
years from 2000-06. Pre-merger and post-merger financial ratios have been examined using paired
sample t test. The results of the analysis reveal that there is significant difference between the financial
performance of the companies before and after the merger.
Dr. V. K. Shobhana and Dr. N. Deepa (2011): Made a probe into the fulfilment of motives as vowed in
the merger deals of the nine select merged banks. The study uses Summary Statistics, Wilcoxon
Matched Paired Signed Rank Test and ‘t’ test for analysis and interpretation of data pertaining to the
five pre- and post-merger periods each.
2.1 The objective of the study
 To examine the merger between Vodafone and Idea and the specifics of their deal.
 To analyze the impact of the merger on the Indian Telecom industry.
 To Study the financial performance of Vodafone-Idea post-merger.
 To study about the Vodafone idea limited post-performance.
 To study about consumer expectations from the Vodafone idea limited.
 To Analyzed Stock Performance.

3. RESEARCH METHODOLOGY
The Indian telecom sector is going through a transforming phase now-a-days, telecom operators are
going for mergers and acquisitions to survive in the industry and many players have even existed the
market due to cut-throat competition and heavy losses. Vodafone-Idea merger requires through study
and analysis because this merger created a stir in the market and forced other market players to merge
with big companies.
Data Analysis
 Financial modelling.
 Determination of financial performance post-merger.
 Balance sheet and Profit and loss statements.
Pre-Merger Industrial Dynamics:
The telecom industry before the merger of

1% Bharti Vodafone -idea looked like the above chart
1% 0% 0% with Airtel the clear market leaders with
5% Vodafone
6% 24.22% share and Vodafone and Idea
Idea second and third with 19.16% and 17.01%
8% 24%
Reliance market share respectively. Jio entered the
9% industry recently and gained a market share
Aircel
10% 19% of 9.93% almost instantly through its free
BSNL services and appealing offers.
17%
Tata
Telenor
Sistema
Videocon
PSU: 8.62% Pvt: 91.38%
percentage of users age Age Group:

Number of Vodafone Idea users
below according to age group.
18
10% 5% Interpretation: Most of respondents are
18-27 young and belong to 18-27 years age
group.
23%
27-40
62%
greater
than 40

Financial Highlights
Pre-Merger: “Idea Cellular Limited”

Balance Sheet as at March 31, 2016
₹ Mn
Particulars As at As at
March 31,
March 31,
2015
2016
EQUITY AND LIABILITIES
Shareholders’ Funds
Share Capital 36,005.09 35,978.44
Reserves and Surplus 206,954.04 182,922.98
242,959.13 218,901.42
Non-Current Liabilities
Long-term borrowings 361,583.11 160,064.86
Deferred tax Liabilities (Net) 27,830.88 16,090.76
Other Long-term Liabilities 34,617.19 11,748.94
Long-term Provisions 3,394.20 2,820.65
427,425.38 190,725.21
Current Liabilities
Short-Term Borrowings 16,455.78 1,513.94
Trade Payables
-Dues of micro enterprises and small enterprises 14.13 8.32
-Dues of creditors other than micro enterprises and small enterprises 32767.50 29693.46
Other Current Liabilities 74,940.47 132,927.38
Short-Term Provisions 3,516.42 2,988.68
127,694.30 167,131.78
TOTAL 798,078.81 576,758.41

ASSETS
Non-Current Assets
Fixed Assets
Tangible Assets 209,194.37 178,980.47
Intangible Assets 439,968.80 142,158.59

Capital Work-in-progress 60,388.27 50,794.46
Non-Current investment 16,668.52 16,466.07
Long-term Loans and Advances 34,078.09 38,906.69
760,298.05 427,306.28
Current Assets
Current Investment 8,321.00 111,675.00
Inventories 851.46 582.98
Trade Receivables 11,360.58 9,321.90
Cash and Bank Balances 7,576.63 15,419.38
Short-term Loans and Advances 9,651.09 11,391.22
Other Current Assets 20.00 1,061.65
37,780.76 149,452.13
TOTAL 798,078.81 576,758.41
Statement of Profit and Loss for the year ended March 31,2016
₹ Mn
Particulars For the year For the year
ended ended
March 31, March 31,
2016 2015
INCOME
Service Revenue 357,853.67 312,520.70
Other Operating Income 311.78 274.01
Other Income 1,834.40 4,523.37
TOTAL 359,999.85 317,318.08

OPERATING EXPENDITURE
Personnel Expenditure 14,644.36 13,587.28
Network Expenses and IT outsourcing cost 93,729.02 82,886.64
License Fees and Spectrum Usage Charges 41,507.83 35,351.47
Roaming & Access Charges 46,436.26 47,313.23
Subscriber Acquisition & Servicing Expenditure 30,019.4 25,038.29
Advertisement and Business Promotion Expenditure 4,833.19 4,929.13
Administration & other Expenses 8,752.75 6,954.55

239,922.89 216,060.59
PROFIT BEFORE INTEREST & FINANCE CHARGES, 120,076.96 101,257.49

DEPRECIATION, AMORTISATION & TAXES
Interest & Finance Charges 17,979.57 9,316.58
Depreciation 47,482.87 41,434.95
Amortisation of Intangible Assets 14,512.11 7,115.13
PROFIT BEFORE TAX 40,102.41 43,390.83

Provision for Taxation - Current 8,621.82 14,530.99
- Deferred 11,740.12 780.27
- MAT Credit (6,426.09) (18.78)
PROFIT AFTER TAX 26,166.56 28,098.35

Earnings Per Share of ` 10 each fully paid up (in `)
Basic 7.27 7.94
Diluted 7.25 7.91
Performance Highlights (Consolidated)
Revenue
400
359.8
350 315.7
300 265.2
250 224.6
195.4
200
150
100
50
0 Series1
2012 2013 2014 2015 2016

Chart Title Cash Profit

350.00%
120 109.3
300.00%
100 86.2
250.00%
200.00% 80 70.4
150.00%
60 49.8
100.00% 40.3
40
50.00%
0.00% 20
2012 2013 2014 2015 2016
Revenue Market
14.30% 15.00% 16.20% 17.50% 18.90%
0
Share (%)
2012 2013 2014 2015 2016
Net Debt to
2.6 2.15 2.44 1.27 3.02
Operating EBITDA Series1
Pre-Merger: “Vodafone Group Plc”

Balance Sheet as at March 31, 2016
Particulars 2016 £m 2015 £m
Non-current assets
Goodwill 22,789 22,53
Other intangible assets 23,979 20,95
Property, plant and equipment 28,082 26,60
Investments in associates and joint ventures (82) (3
Other investments 3,662 3,75
Deferred tax assets 22,382 23,84
Post-employment benefits 177 16
Trade and other receivables 4,580 4,86
105,569 102,72
Current assets
Inventory 565 48
Taxation recoverable 1,109 57
Trade and other receivables 9,141 8,05

Other investments 4,220 3,85
Cash and cash equivalents 10,218 6,88
Assets held for sale 2,891 _
28,144 19,84
Total assets 133,713 122,57
Liabilities
Equity
Called up share capital 3,792 3,79
Additional paid-in capital 119,925 117,05
Treasury shares (6,940) (7,045
Accumulated losses (56,608) (49,471
Accumulated other comprehensive income 5,716 1,81
Total equity attributable to owners of the parent 65,885 66,14
Non-controlling interests 1,437 1,59
Put options over non-controlling interests (5) (7
Total non-controlling interests 1,432 1,58
Total equity 67,317 67,73
Non-current liabilities
Long-term borrowings 29,327 22,43
Deferred tax liabilities 446 59
Post-employment benefits 447 56
Provisions 1,280 1,08
Trade and other payables 1,501 1,26
33,001 25,94
Current liabilities
Short-term borrowings 16,020 12,62
Taxation liabilities 540 59

Provisions 757 76
Trade and other payables 15,732 14,90
Liabilities held for sale 346
33,395 28,89
Total equity and liabilities 133,713 122,57
Statement of Profit and Loss for the year ended March 31,2016
Particulars 2016 £m 2015 £m
Continuing operations
Revenue 40,973 42,227
Cost of sales (30,435) (30,882)
Gross profit 10,538 11,345
Selling and distribution expenses (3,570) (3,455)
Administrative expenses (5,110) (5,746)
Share of result of equity accounted associates and joint 44 (63)

ventures
Impairment losses (450) -
Other income and expense (75) (114)
Operating profit 1,377 1,967
Non-operating income and expense (2) (19)
Investment income 300 883
Financing costs (2,124) (1,736)
Profit before taxation (449) 1,095
Income tax (expense)/credit (3,369) 4,765
(Loss)/profit for the financial year from continuing (3,818) 5,860

operations
Profit for the financial year from discontinued operations - 57
(Loss)/profit for the financial year (3,818) 5,917
Attributable to:

– Owners of the parent (4,024) 5,761
– Non-controlling interests 206 156
(Loss)/profit for the financial year (3,818) 5,917
(Loss)/earnings per share
From continuing operations:
– Basic (15.08) p 21.53p
– Diluted (15.08) p 21.42p
Total Group:
– Basic (15.08) p 21.75p
– Diluted (15.08) p 21.63p
(Loss)/profit for the financial year
Other comprehensive income:
Items that may be reclassified to profit or loss in subsequent

years
(Losses)/gains on revaluation of available-for-sale (2) 4

investments, net of tax
Foreign exchange translation differences, net of tax 3,540 (6,516)
Foreign exchange losses/(gains) transferred to the income 70 (1)

statement
Fair value gains transferred to the income statement - (9)
Other, net of tax 34 7
Total items that may be classified to profit or loss in 3,642 (6,515)

subsequent years
Items that will not be reclassified to profit or loss in

subsequent years
Net actuarial gains/(losses) on defined benefit pension 126 (212)

schemes, net of tax
Total items that will not be classified to profit or loss in 126 (212)
subsequent years
Other comprehensive income/(expense) 3,768 (6,727)

Total comprehensive income/(expense) for the year (50) (810)
Attributable to:
– Owners of the parent (123) (1,076)
– Non-controlling interests 73 266
(50) (810)
Financial indicators:
This has been a strong year of execution for the Group, delivering a return to organic growth in both
revenue and EBITDA for the first time since 2008. With the recovery of our European performance
and the continued strong growth in AMAP, we met our financial guidance for both EBITDA and free
cash flow and increased our dividend per share by 2.0% to 11.45 pence.
Organic service revenue growth:
%
Growth in revenue demonstrates our ability to increase our customer base and stabilize or raise ARPU.
Our aim was to return to service revenue growth.
We returned to service revenue growth supported by our Project Spring investment program and
achieved stabilization in our European businesses.
Organic service revenue growth

2 1.5
1.5
1
0.5
0
-0.5
-1
-1.6
-1.5
-2
-2.6
-2.5
-3
2014 2015 2016
Series1 -2.6 -1.6 1.5

EBITDA
12 11.9
11.8
11.6
11.6
11.4
11.2 11.1
11
10.8
10.6
2014 2015 2016
Series 1
Free cash flow

5
4.5 2014, 4.4
4
3.5
3
Axis Title
2.5
2 Series1
1.5
1 2015, 1.1 2016, 1
0.5
0
0 0.5 1 1.5 2 2.5 3 3.5
Axis Title
Dividend per share

14
12
11 11.22 11.45
10
8
Series
6
0 0
2014 2015 2016

Post-Merger: “Vodafone Idea Limited”

Consolidated Balance Sheet as at March 31, 2019
₹Mn
Particulars As at As a
March 31, 2019 March 31, 201
ASSETS
Non-current assets
Property, plant and equipment 502,526 244,54
Capital work-in-progress 23,587 6,51
Investment property 672
Goodwill on consolidation 36 6
Other intangible assets 1,274,767 552,30
Intangible assets under development 27,443 29,34
Investments accounted for using the equity method 15,298 16,60
Financial assets
Long term loans to employees 8 2
Other non-current financial assets 10,362 4,18
Deferred tax assets (net) 103,385 12,05
Other non-current assets 155,099 17,79
Total non-current assets (A) 2,113,183 883,42

Current assets
Inventories 42 36
Financial assets
Current investments 67,088 56,30
Trade receivables 33,000 8,87
Cash and cash equivalents 8,428 19
Bank balance other than cash and cash equivalents 1,480 9
Loans to joint venture and others 19 2
Other current financial assets 680 31
Current tax assets (net) - 7,75
Other current assets 71,260 17,91
Total current assets (B) 181,997 91,83
Assets classified as held for sale (AHFS) (C) 1,815 10,50
Total Assets (A + B + C) 2,296,995 985,77

Liabilities
Equity
Equity share capital 87,356 43,59
Other equity 508,992 229,03
Total equity (A) 596,348 272,62
Liabilities
Financial liabilities
Long term borrowings 1,044,029 569,40
Trade payables 8,680
Other non-current financial liabilities 97,381 26,06
Long term provisions 3,467 3,10
Deferred tax liabilities (net) 471 65
Other non-current liabilities 4,235 5,60
Total non-current liabilities (B) 1,158,263 604,83

Current liabilities
Short term borrowings 41,207 21
Trade payables 126,486 35,47
Other current financial liabilities 303,946 43,82
Other current liabilities 69,499 26,59
Short term provisions 379 22
Total current liabilities (C) 541,517 106,33
Liabilities classified as held for sale (D) 867 1,97
Total Equity and Liabilities (A + B + C + D) 2,296,995 985,77
Consolidated Statement of Profit and Loss for the year ended March 31, 2019
₹ Mn
Particulars For the year ended For the year ended
March 31, 2019 March 31, 2018
INCOME
Service revenue 369,865 282,420
Sale of trading goods 191 51
Other operating income 869 318
Revenue from operations 370,925 282,789

Other income 7,311 3,530
TOTAL INCOME 378,236 286,319

Cost of trading goods 260 73
Employee benefit expenses 22,944 15,430
Network expenses and IT outsourcing cost 170,052 97,334
License fees and spectrum usage charges 39,331 28,667
Roaming and access charges 41,690 35,358
Subscriber acquisition and servicing expenditure 28,007 27,942
Advertisement, business promotion expenditure and content 10,439 8,148
cost
Other expenses 17,772 9,362
330,495 222,314

PROFIT/(LOSS) BEFORE FINANCE COSTS, 47,741 64,005

DEPRECIATION, AMORTISATION, SHARE OF
NET
PROFIT/(LOSS) OF JOINT VENTURES AND

ASSOCIATE, EXCEPTIONAL ITEMS AND TAX
Finance costs 94,628 48,130
Depreciation 77,984 50,630
Amortisation 67,372 33,461
PROFIT/(LOSS) BEFORE SHARE OF (192,243) (68,216)

PROFIT/(LOSS) OF JOINT VENTURES AND
ASSOCIATE, EXCEPTIONAL ITEMS AND TAX
Add: Share in profits/(losses) of joint ventures (net) 2,707 3,458
Add: Share in profit/(loss) of associate (739) (234)
Profit/(Loss) before exceptional items and tax (190,275) (64,992)

Exceptional items (net) 8,521 -
PROFIT/(LOSS) BEFORE TAX (181,754) (64,992)

Tax expense:
– Current tax 182 1,234
– Deferred tax (35,897) (24,544)
PROFIT/(LOSS) AFTER TAX (146,039) (41,682)

OTHER COMPREHENSIVE INCOME/(LOSS)
Items not to be reclassified to profit or loss in
subsequent periods:
Re-measurement gains on defined benefit plans 501 442
Income tax effect (178) (152)
Group’s share in other comprehensive income/(loss) of joint 5 (7)
ventures and
associate (net of taxes)
Other comprehensive income/(loss) for the year, net of 328 283
tax
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR (145,711) (41,399)

THE YEAR

Earnings/(loss) per equity share of ` 10 each:
Basic (21.16) (11.36)
Diluted (21.16) (11.36)

Consolidated Balance Sheet as at March 31, 2021

₹Mn
Particulars As at As at
March 31, 2021 March 31, 2020
ASSETS
Non-current assets
Property, plant and equipment (including RoU Assets) 575,704 663,113
Capital work-in-progress 5,996 10,415
Investment property - 660
Intangible assets 1,099,200 1,194,592
Intangible assets under development 63 966
Investments accounted for using the equity method 41 15,244
Financial assets
Other non-current financial assets 77,323 82,459
Deferred tax assets (net) 23 20
Other non-current assets 135,461 134,866
Total non-current assets (A) 1,893,811 2,102,335

Current assets
Inventories 6 25
Financial assets
Current investments - 4,548
Trade receivables 25,070 30,943
Cash and cash equivalents 3,503 3,708
Bank balance other than cash and cash equivalents 18,662 22,922
Loans to joint venture and others 9 9
Other current financial assets 2,117 23,033
Other current assets 90,975 81,673
Total current assets (B) 140,342 166,861

Assets classified as held for sale (AHFS) (C) 653 -
Total Assets (A+B+C) 2,034,806 2,269,196

Equity
Equity share capital 287,354 287,354
Other equity (669,634) (227,555)
Total equity (A) (382,280) 59,799

Liabilities
Long term borrowings
Loans from banks and others 64,846 86,279
Deferred payment obligations 1,509,309 876,525
Other non-current financial liabilities 172,819 274,073
Long term provisions 416 3,421
Deferred tax liabilities (net) 22 38
Other non-current liabilities 4,381 4,611
Total non-current liabilities (B) 1,753,061 1,251,607

Current liabilities
Short term borrowings - 322
Other current financial liabilities 466,819 377,135
Other current liabilities 63,991 462,168
Short term provisions 458 493
Total current liabilities (C) 664,025 957,790
Total Equity and Liabilities (A+B+C) 2,034,806 2,269,196
CONSOLIDATED STATEMENT OF PROFIT AND LOSS for the year ended March 31, 2021
₹Mn
Particulars For the year ended For the year ended
March 31, 2021 March 31, 2020
INCOME
Service revenue 419,331 449,123
Sale of trading goods 51 44
Other operating income 140 408
Revenue from operations 419,522 449,575
Other income 1,742 10,393
Total income 421,264 459,968

Cost of trading goods 30 39
Employee benefit expenses 20,300 21,643
Network expenses and IT outsourcing cost 95,938 109,916
License fees and spectrum usage charges 41,295 48,482
Roaming and access charges 52,906 59,976
Subscriber acquisition and servicing expenditure 17,677 29,299
Advertisement, business promotion expenditure and content cost 7,875 11,774
Other expenses 14,044 19,321
250,065 300,450
Profit/(Loss) before finance costs, depreciation, amortisation, 171,199 159,518

share of net profit/(loss) of joint ventures and associate,
exceptional items and tax
Finance costs 179,981 153,920
Depreciation 145,013 152,080
Amortisation 91,372 91,484
Profit/(Loss) before share of profit/(loss) of joint ventures (245,167) (237,966)

and associate, exceptional items and tax
Add: Share in profits/(loss) of joint ventures (net) 2,314 3,677
Add: Share in profit/(loss) of associate - (124)
Profit/(Loss) before exceptional items and tax (242,853) (234,413)

Exceptional items (net) (199,681) (383,557)
Profit/(Loss) before tax (442,534) (617,970)

Other comprehensive income/(loss)

Items not to be reclassified to profit or loss in subsequent
periods:
Re-measurement gains/(loss) on defined benefit plans 374 (281)
Income tax effect (4) 193
Group’s share in other comprehensive income/(loss) of joint (2) (2)
ventures and
associate (net of taxes)
Other comprehensive income/(loss) for the year, net of tax 368 (90)
Total comprehensive income/(loss) for the year (441,963) (738,871)

Earnings/(loss) per equity share of ₹10 each:
Basic (15.40) (27.26)
Diluted (15.40) (27.26)
Stock Performance:
The performance of the Company’s share price the broad-based BSE and NSE indices during the Financial
Year 2020-21 is as under:
 Comparison of the Company’s share price with BSE Sensex
BSE
16
14 13.8
13.45
12.62 13
12 11.62
11.07 10.91 11.24 11.33
10.62 10.73 10.74 10.64 10.61 10.64
10 10.19 9.81
9.56 9.5 9.25
8.75 8.9 8.8
8 8.4 8.35
7.85 7.64 7.69 7.6
7.17 High
6.56
6 6.03
4.88
4 4.2 3.94 Low
3.02
2
Close
0
 Comparison of the Company’s share price with NSE Nifty

NSE
40
35 11.24 11.33
30 9.56 10.64 9.25 Close
10.62 10.19 9.81
25 8.4 8.75 10.61 10.64
20 6.56 6.03 7.64 7.69 8.35 8.9 8.8
15 7.17 7.6
4.2 3.94 12.62 11.07 13.45 13.8 13 11.62 Low
10 10.73 9.5 10.74 10.91
5 3.02 7.85
4.88
0 0
High
Recommendation
The merger of Vodafone and Idea Cellular will be watched keenly by management gurus the world over. It is
not often that an Indian company and the subsidiary of a multinational corporation agree to come together. Two
brands will lead to extra expenditure and mixed messaging. If the whole idea behind the merger is to achieve
synergies and cut costs, there is no reason why both the brands should continue.
Conclusion
It can be concluded that the merger was needed in order to fight the competitive pricing policy taken up by
Reliance Jio. The consumer is the most beneficial because of this merger as now all the telecom companies will
try to bring in the best technology at the best price and with better customer service in order to maintain
customer loyalty. The merger of Vodafone and Idea is a perfect example of a market that mostly benefits the
customers. This deal released the telecom industry from the pressure of fierce prices and tariffs. The entry of
Reliance Jio into the telecom industry had a huge impact.
References
https://www.vodafone.com
https://www.ideacellular.com
https://www.vodafone.in/about-us/company-history?section=consumer
https://ijclp.com
https://www.thekeepitsimple.com

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“VODAFONE AND IDEA: AN ANALYSIS OF

PARUL UNIVERSITY FAULTY OF MANAGEMENT STUDIES.

IJCRT2203056 International Journal of Creative Research Thoughts (IJCRT) www.ijcrt.org a399

Pre-Merger Industrial Dynamics:

The telecom industry before the merger of

PSU: 8.62% Pvt: 91.38%

percentage of users age Age Group:

IJCRT2203056 International Journal of Creative Research Thoughts (IJCRT) www.ijcrt.org a400

Pre-Merger: “Idea Cellular Limited”

TOTAL 798,078.81 576,758.41

IJCRT2203056 International Journal of Creative Research Thoughts (IJCRT) www.ijcrt.org a401

TOTAL 798,078.81 576,758.41

TOTAL 359,999.85 317,318.08

IJCRT2203056 International Journal of Creative Research Thoughts (IJCRT) www.ijcrt.org a402

PROFIT BEFORE INTEREST & FINANCE CHARGES, 120,076.96 101,257.49

PROFIT BEFORE TAX 40,102.41 43,390.83

PROFIT AFTER TAX 26,166.56 28,098.35

Performance Highlights (Consolidated)

IJCRT2203056 International Journal of Creative Research Thoughts (IJCRT) www.ijcrt.org a403

Chart Title Cash Profit

Pre-Merger: “Vodafone Group Plc”

Other intangible assets 23,979 20,95

Property, plant and equipment 28,082 26,60

Investments in associates and joint ventures (82) (3

Other investments 3,662 3,75

Deferred tax assets 22,382 23,84

Post-employment benefits 177 16

Trade and other receivables 4,580 4,86

Taxation recoverable 1,109 57

Trade and other receivables 9,141 8,05

IJCRT2203056 International Journal of Creative Research Thoughts (IJCRT) www.ijcrt.org a404

Cash and cash equivalents 10,218 6,88

Assets held for sale 2,891 _

Total assets 133,713 122,57

Called up share capital 3,792 3,79

Additional paid-in capital 119,925 117,05

Treasury shares (6,940) (7,045

Accumulated losses (56,608) (49,471

Accumulated other comprehensive income 5,716 1,81

Total equity attributable to owners of the parent 65,885 66,14

Non-controlling interests 1,437 1,59

Put options over non-controlling interests (5) (7

Total non-controlling interests 1,432 1,58

Total equity 67,317 67,73

Long-term borrowings 29,327 22,43

Deferred tax liabilities 446 59

Post-employment benefits 447 56

Provisions 1,280 1,08

Trade and other payables 1,501 1,26

Short-term borrowings 16,020 12,62

Taxation liabilities 540 59

IJCRT2203056 International Journal of Creative Research Thoughts (IJCRT) www.ijcrt.org a405

Trade and other payables 15,732 14,90

Liabilities held for sale 346

Total equity and liabilities 133,713 122,57

Revenue 40,973 42,227

Cost of sales (30,435) (30,882)

Gross profit 10,538 11,345

Selling and distribution expenses (3,570) (3,455)