Idea Cellular today said that it had completed the allotment 326,633,165 equity shares to the Aditya Birla Group entities, at an issue price of Rs 99.50 per share (including premium of Rs 89.50 per share) aggregating to Rs 3,250 Crore. As a result of this preferential allotment, the aggregate shareholding of the Promoter Group in Idea has increased from 42.4% to 47.2%. This preferential allotment was subsequently approved by Idea’s shareholders in the Extraordinary General Meeting held on January 30, 2018.
The preferential allotment of equity shares follows the approval by the Board of Directors of Idea on January 4, 2018, for a total capital raise of up to Rs 6,750 Crore including Rs 3,250 Crore through a preferential allotment to the Promoter Group, and up to Rs 3,500 Crore through a further preferential allotment, qualified institutional placement, rights issue or such other route that Idea’s Board determines.
Announcing the completion of the preferential issue, Mr Kumar Mangalam Birla, Chairman, Aditya Birla Group said, “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. With the planned fundraise combined with the recently announced sale of Idea’s towers and potential monetisation of the Indus stake, the Company will be better capitalised to participate in the growth opportunities offered by the sector.”
The equity infusion by the Promoter Group of Rs 3,250 Crore, along with the proposed further capital raise of up to Rs 3,500 Crore, will reduce Idea’s net-debt and as a result, Vodafone’s net-debt contribution to the merged entity will also be reduced by an equivalent amount.
Additionally, the recently announced sale of Idea’s and Vodafone India’s standalone towers to American Tower Corporation for an aggregate enterprise value of Rs 7,850 Crore and the potential monetisation of Idea’s 11.15% stake in Indus Towers, will further augment the long-term capital resources of the Company. These proceeds will significantly strengthen the balance sheet of the merged entity (Idea and Vodafone India) creating a resilient entity for the future.