International Finance Corporation (IFC), the private sector investment arm of World Bank Group, has invested Rs 389 crore (around $65 million) to pick 0.8 per cent stake in cellular services provider Idea Cellular Limited. The investment was through a participation in a qualified institutional placement (QIP).
In June, the company had raised Rs 3,000 crore by selling 223.9 million equity shares to qualified institutional buyers at a share price of Rs 134 per share.
The Aditya Birla Group company will use the proceeds to meet its business requirements including payment towards spectrum that may be auctioned by DoT in future and for general corporate purposes.
Meanwhile, Idea Cellular also raised another $126.61 million from existing investor Axiata Group Berhad through a preferential allotment. This has allowed Axiata to maintain its previous holding.
Mumbai-based Idea offers pan India GSM mobile services in all 22 service areas of India. Idea Cellular is the third-largest wireless operator in India and the seventh-largest mobile telecommunications company (based on operations in a single country) in the world based on number of subscribers.
Earlier this month, Providence Equity Partners, through its affiliate P5 Asia Holding Investments (Mauritius) Ltd, sold 2.40 per cent stake in Idea Cellular for $233.42 million through an open market transaction. Following the stake sale, Providence Equity Partners owns 6.91 per cent stake in the telco.
Shares of Idea Cellular were trading at Rs 169.35 per share, down 2.64 per cent from their previous close on the BSE in weak Mumbai market.
This is not the first time IFC has invested in a company through an institutional placement. Last year it had invested $100 million in Fortis Healthcare through a mix of FCCB, preferential allotment and participation in an institutional placement programme.
(Edited by Joby Puthuparampil Johnson)