Aditya Birla Group-owned Grasim Industries, which owns 4.75 per cent share in Idea Cellular, has denied the rumor that it would be making a large investment into the telecom operator as part of the latter’s planned merger with Vodafone Group’s India unit.
In a statement to BSE, the company said, “Grasim would like to clarify that its knowledge of the proposed Idea-Vodafone transaction is restricted to what has been put out by Idea Cellular in the public domain. Regrettably, some of the investors / analysts have raised concerns that to take this process forward, large investments would be made by Grasim into Idea, fuelled by rumors.
“The Company denies the rumor that it would be making a large investment into Idea as part of the transaction being contemplated,” Grasim Industries informed BSE. “No such proposal is under evaluation by its Board,” it added.
Vodafone Group and Idea Cellular had earlier this week confirmed that they have been in preliminary discussions for a potential merger, which would be effected through the issue of new shares in Idea to Vodafone and would result in Vodafone deconsolidating Vodafone India.
The merger of the two giants in India could lead to a new number one telecom operator by subscribers and revenue market share , displacing Bharti Airtel, which currently leads the Indian market in revenue and subscriber terms.
The development comes within months of Reliance Jio Infocommm’s entry into the market which has already led to consolidation of the telecom industry in the country.
Earlier, Anil Ambani-led Reliance Communications (RCom) had also announced its plan to merge its wireless operations with Aircel in the fourth quarter of FY16, which subject to lender, shareholder and regulatory approval. It is also in a process of merging operations with Sistema Shyam Teleservices, which currently operates under MTS India brand.