Idea Cellular and Vodafone India today announced merger to form country’s biggest telecom company. According to the deal, Vodafone will hold 45 per cent stakes in the new company, while Idea Cellular will have a command over 26 per cent stakes.Since its entry in India in 2007, Vodafone has become number 2 operator in the country, but its journey has been tumultuous as it is locked in a legal battle with the government over a 2 billion dollar retrospective tax claim over its acquisition of Vodafone India from Hutchison in 2007.
It had written down value of business by 5 billion pound (3.35 billion dollar) late last year. The British firm has pumped in more than 7 billion dollar into the India unit.
Backed by Mukesh Ambani Jio Infocomm is offering free voice calls and data till March and has notched up 74 million users. It has already invested over 25 billion dollar and is investing another Rs 30,000 crore (4.8 billion dollar).
The Aditya Birla group owns 42.2 per cent of Idea while Malaysian carrier Axiata Group Bhd has a 19.8 per cent stake.
Vodafone India Ltd is a wholly-owned unit of Vodafone Group Plc.Idea rose as much as 29 per cent, the most since the shares began trading in 2007, taking the company’s market valuation above US dollar 5 billion. Vodafone gained as much as 4.1 per cent.
In a separate BSE filing, Idea Cellular said it plans to raise Rs 500 crore through non-convertible debentures on private placement basis.