Idea Cellular has announced plans to raise a total of around INR67.5 billion (USD1.07 billion) prior to its merger with Vodafone India. The Economic Times writes that the first INR32.5 billion will be raised via the issue of preferential shares at a price of INR99.5 per unit to four of parent company Aditya Birla Group’s other divisions, namely: Birla TMT Holdings, Elaine Investments (Singapore), Oriana Investments (Singapore) and Surya Kiran Investments (Singapore). Following the allocation, Aditya Birla’s stake in Idea Cellular will increase to approximately 47% from its current 42.4% share. In addition, Idea’s board has begun evaluating options to raise an additional INR35 billion through preferential shares, qualified institutional placements or a rights issue.
Separately, Vodafone India issued a statement noting that Idea’s fundraising would aid the enlarged Vodafone-Idea cellco post-merger: ‘The proceeds from this capital raise, in addition to the INR78.5 billion of proceeds from the announced disposal of Vodafone India and Idea’s standalone tower businesses, will be used to strengthen the balance sheet of the merged entity.’