Shares of Idea Cellular rose by almost 4.6% on the BSE in early trade on Tuesday on media reports that the long-pending Vodafone-Idea merger has received conditional approval from the Department of Telecommunications (DoT).
Shares of Idea Cellular rose by almost 4.6% on the BSE in early trade on Tuesday on media reports that the long-pending Vodafone-Idea merger has received conditional approval from the Department of Telecommunications (DoT). Shares of Idea Cellular edged up by 4.6% to a high of Rs 57.05 per share on the BSE during morning deals on Tuesday. On the National Stock Exchange, Idea Cellular’s shares touched a high of Rs 57, up 4.4%.
On Monday, the DoT granted conditional approval to the Vodafone India and Idea Cellular merger, PTI reported quoting official sources. The combined operations of the two companies will create the country’s largest telecom operator worth over $23 billion (or over Rs 1.5 lakh crore), with a 35% market share and a subscriber base of around 430 million. “DoT has cleared the Vodafone-Idea merger today. They will have to meet conditions for final approval,” the source told PTI.
According to the source, the telecom department has asked for a cash payment of Rs 3,926 crore pertaining to one-time spectrum charge of Vodafone. The amount can be paid by either of the two companies. The source further added that the DoT has asked Idea Cellular to furnish a combined bank guarantee of Rs 3,342 crore. The merger of Aditya Birla Group’s telecom company Idea Cellular with Vodafone India is expected to give a breather to both the debt-ridden firms. The combined debt of both the companies is estimated to be around Rs 1.15 lakh crore.
The merged entity — which is proposed to be called Vodafone Idea Limited — will have the capacity to provide 4G spectrum in all telecom circles of the country. The merger has already been cleared by the stock exchanges, the Securities and Exchange Board of India, Competition Commission of India (CCI) and the National Company Law Tribunal (NCLT).