Vodafone Group Plc got more free cash flow from its Indian operations compared to its business in its home country during the last financial year.
During the fiscal through March 2016, Vodafone India generated €544 million, more than double than its Vodafone UK operations that gave €265 million, the data showed. The operating cash flow from the Indian operations came despite a lower dividend from its 42 percent shareholding in Indus Towers, a three-way joint venture with Bharti Airtel and Idea Cellular.
During FY15, Vodafone India's operating FCF was at €332 million, while its UK operations generated €185 million, the data showed.
For FY16, Vodafone Group's operating FCF was 0.73 percent higher or at €2884 million compared to its FY15 operating FCF of €2863 million. In fact, Germany contributed the largest operating free cash flow of €651 million, followed by its African unit Vodacom, which gave €792 million.
However, the operating free cash flow from Vodafone India to its parent company assumes significance given that the domestic operations contribute only 12 percent to its overall revenue, much lower than its Germany operations that constitute 19 percent of revenue but slightly higher than the 9 percent revenue contribution from Vodacom. The higher operating free cash flow is a measure of the company's financial performance and the amount that is available to be given to shareholders as dividend. The better operating FCF of Vodafone India subsidiary makes the company's proposed share sale to the public much more attractive because of the better returns that the investors can anticipate to receive.