The chairman of the diversified business conglomerate Aditya Birla Group, the controlling shareholder of India's second-largest telecom operator Idea Cellular Ltd, ruled out plans to sell stake in the mobile carrier, saying it is the group's core business and would remain so.
"There is no question of selling the company (Idea Cellular) or the business...Idea is on a strong wicket, has a strong balance sheet, good franchise and quality of network," Kumar Mangalam Birla told The Economic Times.
Notably, media reports had earlier suggested that the group is mulling to divest its stake in the telecom arm.
As on September 30, 2013, the group held 45.85% equity stake in Idea Cellular, according to data available with the Bombay Stock Exchange. Private equity major Providence Equity Partners holds nearly 10 per cent stake in the firm while Malaysian telecoms major Axiata holds 20 per cent.
Birla told ET that the group has no plans in the near term for large investments or new business forays as it had recently completed a two-year investment phase.
"The priority for us is to digest that and get returns from that large capex. So large investments are not a priority for us," he told the daily.
However, the group is open for foreign partnership in its retail business, subject to the FDI policy, as it seeks to learn “retail processes, retail systems, retail driven profitability, optimization and also getting financial capital.”
In 2012, the Indian government had opened up the retail sector to foreign companies, as part of its effort to boost the flagging economy, despite a wave of political opposition.
Birla, who is facing tough competition from Reliance Industries in the retail business, also acknowledged that Reliance Industries’ entry into telecom business would be a “game changer”.
Mukesh Ambani-led Reliance Industries is reportedly aiming to foray into telecom business with the launch of its high speed wireless broadband services, loosely termed as 4G (fourth generation) services, in metro cities by March 2014 through its arm Reliance Jio Infocomm Ltd, formerly known as Infotel Broadband Services Pvt Ltd.
Reliance Jio was the only company that had won BWA (Broadband Wireless Access) spectrum in all 22 circles in India, by paying Rs 12,848 crore in 2010.
(Edited by Joby Puthuparampil Johnson)