Indian business group Aditya Birla Group has increased its stake in Idea Cellular to 47.2 percent from 42.4 percent.
The additional investment of Rs 3,250 crore in India’s third largest telecom operator shows the confidence of investors in the Indian telecom services industry.
Idea Cellular in a statement said that the company completed the allotment of 326,633,165 equity shares to the promoter group, at an issue price of Rs 99.50 per share including Rs 89.50 per share premium.
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“This equity infusion reiterates the Group’s commitment towards the telecom business and confidence in its growth prospects. Idea is in the process of bringing a world class 4G network to villages, towns and cities across India that will contribute to the transition of the Indian populace towards a digital lifestyle,” Kumar Mangalam Birla, chairman of Aditya Birla Group, said.
The Rs 3,250 crore equity infusion by the promoter group, along with the proposed capital raise of up to Rs 3,500 crore will reduce Idea’s net-debt. As a result Vodafone’s net-debt contribution to the merged entity will also be reduced by an equivalent amount.
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.