Idea Cellular shares surged over 6 per cent on Tuesday after CNBC TV 18 quoting sources reported that it is exploring options and is in talks for a possible merger with Vodafone.
Idea Cellular shares surged over 7 per cent on Tuesday after CNBC TV 18 quoting sources reported that it is exploring options and is in talks for a possible merger with Vodafone. In case of the merger happens between Idea Cellular and Vodafone, it will create India’s largest telecom company. The report also said that if the deal gets through, then Vodafone may not need to bring in its initial public offering.
Reacting to the news, Idea Cellular surged and closed 7.68 per cent up at Rs 101.70. The scrip has opened at Rs 94.90 and touched a high and low of Rs 101.80 and Rs 94.65, respectively. Meanwhile, Sensex closed flat with gain of 4.67 points at 27,990.21.
The potential merger would go through crucial regulatory approvals and may breach 50 per cent market share in few circles. Vodafone refused to comment, while Idea Cellular called the merger talk report absolutely baseless and false, according to CNBC TV18.
Vodafone Group has been preparing to launch a public share sale of the Indian subsidiary through an IPO. The company has reported a 3.4 per cent decline in its India revenue at 1,519 million pound for the first quarter ended June 2016. The figure stood at 1,573 million pound in the same period a year ago. Revenue of Vodafone India, however, in local currency terms grew 3.92 per cent to Rs 11,477.5 crore (at exchange rate of Rs 75.56) in the reported quarter, from Rs 11,016 crore (at Rs 70.21) a year ago.
Idea Cellular posted 76.32 per cent fall in consolidated net profit at Rs 220.42 crore for the quarter ended June 30, 2016 against Rs 930.83 crore in the corresponding quarter last year.