Malaysia-based Axiata, the owner of 20% stake in Idea Cellular, is reportedly planning to sell its share in the country’s third largest telecom operator, following concerns over the telco’s “subdued” valuation.
According to a report in ET, Axiata believes Idea Cellular’s valuation will remain subdued for at least the next three years due to the pricing onslaught stem from the entry of Mukesh Ambani’s Reliance Jio Infocomm. Axiata has informally asked investment bankers to seek buyers for the stake, the report said, adding that Axiata has passed a board resolution to sell its stake in Idea.
The Aditya Birla Group, the parent of Idea Cellular, currently owns 42% of the telecom operator while the rest is held by institutional and retail investors. Idea Cellular is also likely be the worst hit among top operators following the demonetisation of Rs 500 and Rs 1,000 notes earlier this month.
According to a separate report, Idea Cellular was also planning to sell 100 percent stake in its tower arm, dropping its earlier plans to sell a minority stake in the business. Idea Cellular however on Wednesday denied having any proposal to sell 100% stake in its tower arm for a sum of nearly $1 billion.
Following these media report, the Bombay Stock Exchange (BSE) Tuesday sought clarification from the Aditya Birla group’s company. The telco in a statement told BSE that there is no such plan as reported by the media that is being considered by the board.
CNBC-TV18 reported that the Aditya Birla Group Company is looking to sell 11,000 telecom towers for close to $1 billion.The report had said that Idea has reached out to America Tower Corp, Bharti Infratel and Brookfield for tower sale. Idea may retain its stake in Indus Towers, the report added.