Idea Cellular’s current managing director Himanshu Kapania may well become the head of the Vodafone-Idea Cellular merged entity, upon the completion of the merger if media reports are to be believed. The merger is currently awaiting clearance from markets regulator Sebi and the Competition Commission of India.
A person aware of the matter told ET that it’s only logical that Kapania should be heading the merged telco. “The formal decision though hasn’t been taken. There’s enough time left (for the merger),” he added.
The report added that Kapania if appointed as the CEO of the merged telco, will have his task cut out to deal with falling revenue and profits amid intense price competition.
Notably, Aditya Birla Group chairman Kumar Mangalam Birla has already been named the chairman of the merged telecom operator, which will be bigger than current leader Bharti Airtel in revenue and subscribers in the country. In March, an official release said that the chief financial officer position would be with Vodafone, while the chief executive officer and chief operating officer positions will be announced prior to completion of the merger.
However, Vodafone denied that Kapania would be the CEO of the merged entity.
“We categorically deny your speculation that Mr Himanshu Kapania will be the CEO of the entity formed post the merger of Idea Cellular and Vodafone India, and dismiss it as completely baseless, unfounded and unwarranted,” Vodafone said in a statement to the publication.
Analysts previously said that Vodafone India and Idea Cellular merger would take at least another four to five quarters to materialise, even as the proposed transaction set to face many regulatory hurdles. The merged entity, which is expected to be completed in mid-2018, would be stronger placed to take on the severe competitive pressures triggered by the entry of Reliance Jio.
ICRA recently said that the ongoing tariff war between both these telecom operators would continue for another two to three-quarters, while they work as separate entities. It had then said that the merged Vodafone-Idea Cellular entity would have the financial flexibility to counter competition due to scale benefits and better use of spectrum.
Vodafone will own 45.1% in the combined entity after transferring 4.9% to the promoters of Idea Cellular for Rs 38,740 crore in cash post the merger. Kumar Mangalam Birla and other promoters of Idea Group will hold 26%, and the public will own the rest, according to an official statement.
According to the agreement, both Vodafone and Idea Cellular promoters will have the right to nominate three directors each on the board of the combined entity which will be comprised of 12 directors, six of whom will be independent.