Shares of Birla group telecom company Idea Cellular surged 3% after the board of directors approved the plan to raise Rs 3,250 crore by selling shares on a preferential basis. The board of directors of Idea Cellular approved an issuance of 32.66 crore equity shares of face value Rs 10 at a price of Rs 99.5 on a preferential basis to the promoter group entities Birla TMT Holdings Pvt Ltd, Elaine Investments Pte Ltd, Oriana Investments Pte Ltd, Surya Kiran Investments Pte Ltd. The total money mobilised through the preferential allotment would be Rs 3,250 crore. Following the development, the stock Idea Cellular rose as much as 2.97% to the day’s high of Rs 105.6 on BSE.
The trading volumes in the shares of Idea Cellular spiked substantially, as at 2:55 pm, about 1.15 crore shares exchanged hands on both BSE and NSE with more than 1.05 crore on NSE alone. “The Aditya Birla Group remains committed towards the telecom business. The group is in the process of creating a large digital infrastructure and to contribute significantly towards the fulfilment of the ‘Digital India’ vision of the Hon’ble Prime Minister. At a time when the telecom industry is going through a challenging environment, this equity infusion by the group in Idea is another step towards reinforcing the group’s commitment,” Idea Cellular said in an exchange filing quoting Kumar Mangalam Birla, Chairman.
The equity issue is subject to shareholders and other regulatory approvals. The extraordinary general meeting of shareholders is to be convened on 30 January 2018. The issue is expected to complete by early February 2018 post which the shareholding pattern of the promoter group in Idea Cellular will increase to 47.2% from existing level of 42.4%.
Meanwhile, the key equity indices Sensex and Nifty edged higher in the late afternoon trades. BSE Sensex jumped 188.29 points to the day’s high of 33,981.67 and NSE Nifty added 53.85 points to mark the day’s high of 10497.05. The upsurge in the blue-chip shares such as Tata Steel, L&T, ONGC, Dr Reddy’s, Asian Paints, Sun Pharma, Coal India, Bajaj Finance, Hindustan Petroleum Corporation, Vedanta, and State Bank of India led the benchmark indices higher.