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Vodafone Idea Rejig: What experts make of new CEO announcement

Updated : August 20, 2019 09:05 AM IST

Vodafone Idea stock will be in focus on Tuesday after its CEO Balesh Sharma stepped down from his position citing personal reasons.

Sharma will continue to be with the Vodafone group but will take on another responsibility.

Ravinder Takkar, currently Vodafone Group's representative in India, will be appointed as the new MD and CEO with immediate effect, the company said in a statement.

Takkar has been a part of both Vodafone Idea as well as Indus Towers.

Vodafone Idea has been under a lot of pressure, which could be the reason behind the management change – one, look at the way the stock price collapsed. It is down 70 percent-plus in this year itself. The rights' issue price was Rs 12.5 and the stock is down 52 percent from that level. So even those investors have lost a lot of money.

The company has also lost a lot of subscribers. So in 2019 itself, they have lost nearly 3 crore subscribers and according to TRAI data for June, more than 40 lakh subscribers had exited Vodafone Idea’s network.

Their losses have been mounting even though the company has nearly completed 80 percent of its operating synergies and the debt continues to remain massive despite equity fundraise at nearly Rs 1 lakh crore with a net debt to EBITDA of 20 times.

However, some people in the market believe that an executive with an Indian experience would have been more appropriate because Balesh Sharma was a CEO of Czech Republic before he was taken on board in 2017 and he is going to be replaced by Ravinder Takkar. Yes, he has been in India since 2017 since the merger was conceptualized but prior to that he had Romanian experience.
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