SEBI seeks clarification over Idea-Vodafone merger

People walk past a Vodafone store in Hounslow, west London, on May 18, 2010. British mobile phone giant Vodafone said on Tuesday that its annual net profits almost trebled to 8.645 billion pounds on reduced write-downs and increased sales of its broadband Internet services. The world's biggest mobile phone operator by revenue said profit after tax soared to the equivalent of 10.1 billion euros or 12.5 billion dollars in the 12 months to March 31 -- beating its own expectations. AFP PHOTO/CARL DE SOUZA

Market regulator SEBI has sought clarification from Aditya Birla Group firm Idea Cellular regarding its proposed merger with Vodafone Plc’s Indian unit.

Besides, the companies approached the Competition Commission of India (CCI) last month regarding the proposed merger and are awaiting the fair trade regulator’s nod in this regard.

In March, Vodafone India and Idea Cellular announced merger of their operations to create the country’s largest mobile phone operator worth more than USD 23 billion with a 35 per cent market share.

As part of the proposal, the British firm will own 45.1 per cent of the merged entity while the Aditya Birla group, Idea’s parent company, will hold 26 per cent after paying Rs 3,874 crore for a 4.9 per cent stake.

The remaining 28.9 per cent will be held by other shareholders.

Idea Cellular had sought approval from the Securities and Exchange Board of India (SEBI) in April for the proposed merger.

The market regulator has asked for clarifications from the merchant banker involved in the planned Idea-Vodafone merger, as per the latest update. The clarifications being sought by SEBI could not be ascertained.

An e-mail sent to Idea in this regard did not elicit any response.

Earlier, Idea said a joint notification has been filed with the CCI and the Scheme of Arrangement has been filed with SEBI and stock exchanges for their approvals.