Kumar Mangalam Birla-led promoter firms have agreed infuse ₹3,200 crore into Idea Cellular by subscribing to 326 million equity shares of the company on a preferential basis at a price of ₹99.5 per share.
The issue, subject to shareholders and other regulatory approvals, is expected to be completed by early February, 2018, post which the shareholding of the promoter group in Idea will increase to 47.2% from the existing 42.4%.
Idea Cellular’s board on Thursday approved the issuance of equity shares on a preferential basis to the promoter group entities —Birla TMT Holdings Private Limited / Elaine Investments Pte. Ltd. (Singapore) / Oriana Investments Pte. Ltd. (Singapore) / Surya Kiran Investments Pte. Ltd. (Singapore), according to a company statement.
“The Aditya Birla Group remains committed towards the telecom business,” said Kumar Mangalam Birla, chairman, Idea Cellular Limited, commenting on the development.
“The group is in the process of creating a large digital infrastructure to contribute significantly towards fulfilment of the ‘Digital India’ vision of the Prime Minister. At a time when the telecom industry is going through a challenging environment, this equity infusion by the group in Idea is another step towards reinforcing the group’s commitment.”
The company has called an extraordinary general meeting (EGM) of shareholders to be convened on January 30, 2018.
Separately, the board has constituted a committee of board members to evaluate potential routes for raising further capital of up to ₹3,500 crore via preferential issue, qualified institutional placement (QIP) and rights issue.
“Appropriate disclosures will be made once the board approves such issuance of additional capital based on the recommendations of the committee,” said the company statement. The proposed capital raising along with recent announcement of Idea’s standalone towers sale to ATC and the potential monetisation of Idea’s 11.15% stake in Indus Towers, will augment the long-term capital resources of the company,” it added.
Idea is expanding its wireless broadband coverage and capacity with a focus on 4G services. During the first nine months of the financial year 2017-18 Idea added more than 33,500 wireless broadband sites. The current 1,43,500 broadband sites cover 620 million people or 52% of the population), according to the statement which also added that the company was also moving fast to introduce its VoLTE services during 2018.
