Unitech-Pray tell us what value you have created

Unitech has finally broken its silence and has stated the following on its jackpot win:

(a) The controversy has been created by the competition.

(b) It says that it is not taking a premium on the spectrum but has created value. It says that it has invested Rs. 4100 crores in the venture.

Lets discuss the above issues one by one. As far as (a) is concerned, don’t you think the argument sounds familiar? Telecom Minister Raja said the same but used the words “telecom cartel” instead of “competition.” Whats wrong with big shot industrialists. Just like Congress used to blame “foreign hand” and politicians blame “political vendetta” for everything that goes wrong, big businesses are blaming the competition. It seems that all these guys think that we, the people, are just stupid and can’t recognise a SCAM when we see one.

What about (b)? Well, let Unitech tell us what value they have created and where the investement has been made. Also, even taking their word for it, I stiill feel that Rs. 4100 crores cannot become Rs. 11,500 crores in 10 months unless there is scam involved. So, as they say in America, Unitech tell us “Where’s the beef?”

I sincerely hope that everybody keeps the pressure on so that the government takes corrective action. Lets make sure that no spectrum is given without an auction.

Avinash Narula

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My dear Avinash Narula, please check the fcta before saying that Rs 4100 has become 11,500 crore. The licence has not been valued at Rs 11,500 crore which most of the analyst feel as of now.
I don’t want to give away straight away my calculations to you, but in case you have any experience in valuation then go back and do some calculation the licence is valued only around 4,500 crore. Don’t go by the media…they say all………….


sandeep hi!

thanks for your response. If Unitech gets paid Rs. 6120 crores for 60% stake, simple calculation suggest that 100% of the company is Rs. 10,200 crores. Over and above if debt of Rs. 1632 crores paid for the spectrum is also taken over by the company, then the value of the company can be assumes to be Rs. 11,832 crores.

In case you have any other information, I would be happy to correct my statement. Actually, even though I have actually done finance, you don’t need to be a financial expert to figure this out.

Here you don’t need to do valuations and find out the NPV as that has been done by Telenor and based on that they have arrived at what to pay for 60% stake in the company.

Would welcome your calculations to set the record straight.

avinash narula


I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to

say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.



I have mentioned earlier that Unitech had overextended itself. It doesn’t have the financial capability to do the telecom business. This is clear from the fact that they are trying to sell their interest in their hotel projects. Their top executive of the hospitality firm has confirmed that they want to sell their 100% stake in 6 hotel projects under construction for funding other ongoing projects. If they cannot complete their ongoing projects, then how can you expect them to invest in the telecom business.

avinash narula


Unitech has risked jobs of many career oriented and capable candidates joining from vodafone, airtel, Aircel etc.
The company does not seem serious in doing Telecom business since their core area in construction and hospitality…
The fact that even in recruitment they dont have a say for their telecom project. Telenor calls the shots and takes all decisions. this proves Unitech has sold their 60% stake to telenor and made fast buck at the cost of countries money and thru politcal influences…


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