- Mittal family has around 27% stakes in Airtel and Airtel’s share price has gone up by 30% since 1st October 2019.
- Sunil Mittal added another million dollars in his net worth due to troubles lingering around Vodafone.
- While Vodafone is about to exit from the Indian market, the telecom industry in India will be a duopoly between Reliance Jio (the disruptor) and Airtel (the only one survived).
Founder and chairman of Bharti Enterprises – Sunil Mittal added another billion dollars to his net worth. Which is now estimated at around $3.5 billion last year according to Hurun Global Rich List.
This comes after Vodafone’s doubts if it will be able to survive after receiving a debt bill that the telecom giant is unable to pay.
“Sunil Mittal saw his wealth rise to $3.5 billion propelled by speculations of the Indian telecom market becoming a duopoly led by Jio and Airtel.” – Hurun Research commented.
However, Airtel is not debt-free! The telecom giant itself owns somewhere around ₹35000 crores to the telecom department. But even after such hefty dues, Sunil Mittal is still on the list of India’s one of the wealthiest billionaires.
Is Airtel (& Sunil Mittal) in The Safe Zone?
Even after such hefty dues, Airtel’s market cap is said to be ₹ 2.84 trillion while Vodafone-Idea’s market cap is ₹106.32 billion!
It’s not that that Airtel and Sunil Mittal are in the safe zone. Both the entities still have to pay back hefty dues to the telecom sector. But the thing worth noting down here is, while other telecom giants were overshadowed by Reliance Jio’s disruptions it was just Airtel (and Sunil Mittal) that were able to pull themselves out of the disruption hype.
Before the spectrum issue, the net worth of Sunil Mittal dropped from ₹56500 crores to ₹22,500 crores between 2017-2018 (Hurun Research).
“Payment of dues might not affect the credit quality of Bharti Mittal but it will reduce its available cash reserves for India’s operations” – Moody’s.
Safe zone or not but Sunil Mittal and Airtel have survived from the disruption storm driven by Reliance Jio.
Let’s Have a Look at Their Share Price:
Even after troubles, Airtel’s stock plummeted from ₹350 in October 2019 to ₹536 in February. Duopoly might have made other telecom players deeply agonized, but for Airtel and Reliance JIO, it has been a piece of happy news.
“I think the Vodafone Idea will remain and I wish it thrives. It’s important that India remains a 3-player market that’s good from all perspectives (as in), investments, jobs, and reputation.” – Gopal Vittal said.
From the past 1 month, Vodafone-Idea has been struggling to give valid reasons to their investors to invest and inject more money into its business. While Airtel, because it has survived the storm, is now going in the upwards direction.
From the above 2 charts, one thing is clear that Sunil Mittal is not willing to give up the fight, which is why when the Indian telecom industry is expected to be a Duopoly, only 2 major names are there:- Reliance Jio and Airtel.
The mobile service provider posted a loss for the 3rd quarter in a row, losing ₹1035 crores in 3 months (ending December 2019).
Demand from the Department of Telecom broke the back of Airtel and Sunil Mittal and Vodafone-Idea. However Vodafone-Idea much weaker financially as compared to Airtel, it’s game is almost over. Stocks lost nearly 71% of its value in the last 1 year.
Summing Up:
It was unexpected that Airtel and Sunil Mittal would be able to survive the storm but it seems like both of them are in the safe zone (as of now).
While time will tell how much safe the duo is, Reliance JIO still has the ability to disrupt the market and if it does (again) Airtel might not be able to survive the 2nd round of disruption.
BUT, looking at the wealth of Sunil Mittal, we can conclude that the man is preparing himself (and his company) to stand still in front of the conglomerate. Which is itself a tremendous job!
