Idea Cellular, second largest mobile-phone company by market value, has set a floor price of R136.98 per share to institutional investors, the company said in a stock exchange notification. The floor price is about 0.5% premium to Thursday's closing price. Shares of Idea Cellular closed at R136.35, up R0.55 or 0.41% on BSE.
The exact quantum of shares to be issued was not declared by the company. However, the company is estimated to issue 21.90 crore shares, representing 6.59% stake, at the maximum limit of R3,000 crore. The floor price is based on the formula defined by the Securities and Exchange Board of India (Sebi) in its issue of capital and disclosure requirements (ICDR) guidelines.
According to market experts and reports, Idea is raising funds to strengthen its finances ahead of the fresh round of spectrum auctions scheduled later this year.
The company had earlier announced the share sale plan in August. However, it postponed the share sale in November as it waited for clarity on Indian spectrum licences. The company has shelled out nearly R10,400 crore for licenses at a government auction in February.
Idea board had also cleared a preferential issue of shares worth R750 crore to Malaysia's Axiata Group Berhad last August. Axiata's stake in the Gujarat-based telecom company will remain unchanged at around 20%, according to the stock exchange announcement at the time.