Idea Cellular raising $125M afresh from Malaysia’s Axiata; eyes $500M more through QIP

Idea Cellular Ltd, India’s fourth largest telco, has said it is looking to raise up to Rs 3,750 crore through a preferential issue and a placement to institutional investors. The Aditya Birla group firm proposes to raise up to Rs 750 crore ($125 million) from existing investor Axiata (formerly Telekom Malaysia) and as much as Rs 3,000 crore ($500 million) through a qualified institutional placements (QIP), as per a stock market disclosure.

But the company has not yet finalised the exact quantum of money, nor the pricing for the issue.

Axiata currently holds 19.9 per cent of Idea Cellular, which is also backed by the PE firm Providence. At the current market price, Axiata will raise its holding by another 1.3 per cent (approximately), taking its total stake to 21.2 per cent.

However, if the firm, indeed, goes on to float Rs 3,000 crore QIP, Axiata’s holding will shrink back to 19.9 per cent, as per VCCircle estimates.

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.

Idea Cellular scrip closed at Rs 167.35, down 0.98 per cent on the BSE in a flat Mumbai market on Thursday.

Two months ago, Idea Cellular was reportedly looking to divest its 9,400 towers to Axiata to raise funds for capital expenditure, licence renewals and purchase of airwaves.

The Axiata funding deal would be the second major fundraising by an Indian telco after Bharti Airtel, the world’s fourth-biggest cellular carrier by customers, raised $1.26 billion (Rs 6,796 crore) from Qatar Foundation Endowment by selling 5 per cent stake.

(Edited by Sanghamitra Mandal)

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