Idea Cellular raises Rs.3,250 crore through preferential allotment to promoters

Mumbai: Idea Cellular Limited (“Idea” or the “Company”), the 3rd largest wireless operator in India by subscribers, today completed the allotment of 326,633,165 equity shares to the Aditya Birla Group (“ABG” or the “Promoter Group”) entities, at an issue price of Rs.99.50 per share (including a premium of Rs.89.50 per share) aggregating to Rs.3,250 crore. As a result of this preferential allotment, the shareholding of the Promoter Group in Idea has increased from 42.4 per cent to 47.2 per cent.

The preferential allotment of equity shares follows the approval by the Board of Directors of Idea on 04 January 2018, for a total capital raise of up to Rs.6,750 crore including (a) Rs.3,250 crore through a preferential allotment to the Promoter Group and (b) 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. The preferential allotment was subsequently approved by Idea’s shareholders in the Extraordinary General Meeting held on 30 January 2018.

Announcing the completion of the preferential issue, Mr. Kumar Mangalam Birla,Chairman, the 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 fund raise 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. Consequently, 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 per cent 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) leading to a more resilient entity for the future.

About Idea Cellular Ltd.
Idea Cellular is the third largest wireless operator by subscribers in India with a revenue market share of 16.2 per cent (Q2FY18). Idea is listed on National Stock Exchange (NSE), and the Bombay Stock Exchange (BSE) in India. Idea is part of the Aditya Birla Group, which is one of the largest business groups in India. The Aditya Birla Group is a conglomerate with operations in 35 countries and has businesses interests in, among others, mobile telecommunications, financial services, metal and mining, cement, carbon black, textiles, branded apparels, chemicals and fertilisers sectors.