Idea raises Rs 3,250 cr from promoter group

Financial Express
February 13, 2018

Idea Cellular, the telecom arm of the Aditya Birla Group, on Monday said that it has completed allotment of 33 crore equity shares to the Aditya Birla Group entities at an issue price of Rs 99.50 per share, aggregating Rs 3,250 crore.

Idea Cellular, the telecom arm of the Aditya Birla Group, on Monday said that it has completed allotment of 33 crore equity shares to the Aditya Birla Group entities at an issue price of Rs 99.50 per share, aggregating Rs 3,250 crore. This is part of the company’s plans to raise more than Rs 6,700 crore announced in January, as Idea prepares for the proposed merger with Vodafone India.

“Idea Cellular Limited today completed the allotment of 326,633,165 equity shares to the Aditya Birla Group (ABG) entities, at an issue price of Rs 99.50 per share (including premium of Rs 89.50 per share) aggregating to Rs 3,250 crore,” the company said in a statement.

The preferential allotment of equity shares follows the approval of the board of directors on January 4, 2018 for a total fund-raising of up to `6,750 crore, including `3,250 crore through a preferential allotment to the promoter group and up to Rs 3,500 crore through a further preferential allotment, qualified institutional placement, rights issue or any other route that the board determines. The preferential allotment was subsequently approved by Idea’s shareholders at an extraordinary general meeting held on January 30, 2018.

Commenting on the completion of the preferential issue, Kumar Mangalam Birla, chairman of the Aditya Birla Group, said: “This equity infusion reiterates the group’s commitment towards the telecom business and confidence in its growth prospects. With the planned fund-raise, combined with the recently announced sale of Idea’s towers and potential monetisation of the Indus stake, the company will be better capitalised to participate in the growth opportunities offered by the sector.”

Following this preferential allotment, the aggregate shareholding of the promoter group in the company has increased from 42.4% to 47.2%.

The company had earlier said equity infusion by the promoter group, along with the proposed fund-raising of up to Rs 3,500 crore, will reduce Idea’s net debt and as a result Vodafone’s net-debt contribution to the merged entity will also be reduced by an equivalent amount.

In November 2017, Idea and Vodafone had agreed to sell their respective standalone tower businesses in India to ATC Telecom Infrastructure (American Tower) for an aggregate enterprise value of `7,850 crore.

This is part of the Idea and Vodafone India merger announcement of March 2017 where both the parties had announced their intention to sell their standalone tower businesses to strengthen the balance sheet of the combined entity.


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