Idea Cellular, India's third-largest wireless services operator, is raising Rs 750 crore ($126.6 million) from Malaysia's Axiata Group, an existing investor in the company, via preferential allotment, as per a stock market disclosure.
The Securities Allotment Committee of the Board, at its meeting held on June 10, 2014, approved issuing up to 5,18,38,540 equity shares of Rs 10 each for cash at Rs 144.68 per equity share aggregating over Rs 750 crore, on a preferential basis to Axiata Investments 2 (India) Ltd, a wholly owned subsidiary of Axiata Group Berhad, Malaysia, the company said in the filing to BSE.
Idea Cellular said this issuance was pursuant to the resolution passed by its board on August 1, 2013 and would be subject to necessary approvals.
The company would also convene an extraordinary general meeting of the members of the firm on July 10 to approve the preferential issue.
On June 10, 2014, the firm announced that it has raised 3,000 crore by selling shares to institutional investors through qualified institutional placement (QIP) at Rs.134 per share.
Axiata currently holds 19.9 per cent stake in the company. Of this, Axiata Investments 1 (India) owns 14 per cent and rest 5.89 per cent is held by Axiata Investments 2.
The preferential allotment would allow Axiata to maintain its existing holding which got diluted with the QIP.
In 2011, Axiata hiked its stake in the firm to 19.9 per cent by acquiring an additional 0.9 per cent stake through open market purchases in a deal worth Rs 306.69 crore.
The telecom services provider Idea will be investing up to Rs 3,500 crore in the current fiscal to build network and launch 3G services in Delhi by next year.
Shares of Idea Cellular were trading at Rs 144.60 each, down 0.45 per cent on BSE in a weak Mumbai market on Wednesday at 12.57 am.
(Edited by Joby Puthuparampil Johnson)