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Idea Cellular concludes QIP to raise Rs 3,500 crore

Idea Cellular has successfully completed its qualified institutions placement (QIP) to raise Rs 3,500 crore, the company informed the BSE. The telecom operator allotted 424,242,424 equity shares to qualified institutional buyers at Rs 82.50 per equity share to raise this amount. They were sold at a premium of Rs 72.50 per equity share.

About 56% of the equity shares were allotted to Indian investors, and the remaining 44% equity shares were allotted to foreign investors.

Note that earlier this month, the telco had sold 326,633,165 equity shares to the Aditya Birla Group (Idea’s promoter group), at Rs 99.50 per share to raise Rs 3,250 crore. This, along with the Rs 3,500 crore raised via the QIP, has reduced the company’s net-debt to about Rs 6,750 crore.

Merger with Vodafone

The companies had signed a definitive deal in March 2017, following which the Competition Commission of India (CCI) had approved the proposed merger of Vodafone India with Idea Cellular, in July 2017. The following month, August 2017, the joint venture received the nod from the Securities and Exchange Board of India (SEBI). The only pending approval is the National Company Law Tribunal.

As per the merger agreement between the two companies, Vodafone India will invest net-debt equivalent to Idea’s net-debt following the completion of the merger, plus Rs 2,500 crore in the joint venture.

Idea also mentioned that:

Additionally, we have recently announced the sale of Idea’s and Vodafone India’s standalone towers to ATC Telecom Infrastructure Private Limited, which is a subsidiary of American Tower Corporation, for an aggregate enterprise value of Rs 7,850 crore. Further, we continue to evaluate strategic options to monetize Idea’s 11.15% stake in Indus Towers. These proceeds will strengthen the financial position of the merged entity.

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