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Providence part exits Idea Cellular for $234M

05 September, 2014

Private equity firm Providence has struck its debut exit from an India portfolio by partially exiting its eight-year-old investment in Aditya Birla Group-promoted telecom service provider Idea Cellular by selling 2.3 per cent or around a quarter of its holding for Rs 1,414 crore ($234 million) via an open market transaction on Thursday.

Foreign institutional investors Capital World Growth and Income Fund and EuroPacific Growth Fund bought some of the shares sold by the PE firm.

Providence continues to hold 6.8 per cent stake in the company which is valued at around Rs 4,097 crore based on the current market price.

The PE firm has clocked 3x returns on its old investment in the telecom service provider which translates into an internal rate of return (IRR) of 15 per cent in local currency not counting dividends.

Providence had bought about 15 per cent in Idea in 2006 for around Rs 1,800 crore. The telco went through an IPO and Providence’s stake got diluted further later by fresh equity issues.

The PE firm, which focuses on investments in the telecom, media and technology sectors, had separately also invested in the telecom tower firm of the group Aditya Birla Telecom.

Its other Indian portfolio firms include cable and satellite television service provider Hathway Cable and Datacom Ltd, home shopping firm Star CJ Network India and digital entertainment solutions provider UFO Moviez India.

Shares of Idea Cellular closed at Rs 167.25, down 2.96 per cent on the BSE in a flat Mumbai market on Thursday.

(Edited by Joby Puthuparampil Johnson)


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Providence part exits Idea Cellular for $234M

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