MUMBAI — Aggressive spectrum bidding by the top three operators will adversely impact their capital structure in the short-term, ratings agency Crisil said today.
"In the near-term their capital structure will be impacted," it said in a note, adding even the part payments for the spectrum will stretch their key capital ratios.
It said the debt to pre-tax profit ratio for these three, which include Bharti Airtel, Vodafone and Idea Cellular, would go up to 3.9 times from the 3.3 times before the auction.
The three leading operators are reported to have already paid Rs 7,690 crore, including Bharti's Rs 4,725 crore, Vodafone's Rs 1,030 crore and Idea's Rs 1,935 crore.
The total winning bids for the three stand at Rs 89,396 crore of the overall Rs 1.10 lakh crore in bids. Much of the bids were for renewal of spectrum, while in some cases, the operators have also added fresh spectrum with an eye on the future.
"While the trio has had to cough up a lot of money for this, they also got spectrum for 20 years. Additionally, the spectrum they already hold beyond this does not come up for renewal in the medium-term," it said, expecting the three companies to consolidate their positions in the market.
Their debts will "bloat" and it will be a challenge to get the required revenue growth due to stiff competition, which is only going to increase with the entry of Reliance Jio, Crisil said, adding the key monitorable will be the average revenue per minute which the three operators manage.