"Idea Cellular Limited today (Monday) 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", Idea said in a statement. The raised capital will be used to repay debt.
In early January this year Idea had announced that the company is planning to raise a total of Rs 6750 crore - Rs 3250 from allocating preferential shares and Rs 3500 crore from further Preferential Issue, Qualified Institutional Placement (QIP) or Rights Issue. This preferential allotment was subsequently approved by Idea's shareholders in the Extraordinary General Meeting held on January 30, 2018.
The telecom operator has allotted 32.66 crore equity shares at ₹99.50 per share, the company said in a statement. Ltd. (Singapore) / Oriana Investments Pte.
"With the planned fundraise 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", said Kumar Mangalam Birla, Chairman, This equity infusion, as well as the proposed Rs 35-billion capital, 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 said Idea.
The sale of Idea's and Vodafone India's towers to American Tower (ATC) for an enterprise value of Rs 7,850 crore and the potential monetization of Idea's 11.15 percent stake in Indus Towers, will augment the long term capital resources of the company. As a result of this preferential allotment, the aggregate shareholding of the Promoter Group in Idea has increased from 42.4% to 47.2%.
India's second- and third-largest mobile-phone service providers, Vodafone India and Idea Cellular, are in the process of a merger, and the merged outfit is expected to have a new name and brand identity.