Shares of Aditya Birla Group's telecom company Idea Cellular Ltd plunged more than 7% to a one-month low in the late morning deals on Monday on news reports of its merger with Vodafone India "may not meet expected June 30 timeline".
Shares of Aditya Birla Group’s telecom company Idea Cellular Ltd plunged more than 7% to a one-month low in the late morning deals on Monday on news reports of its merger with Vodafone India “may not meet expected June 30 timeline”. According to a PTI report, the DoT (Department of Telecommunications) is seeking to raise a fresh demand of Rs 4,700 crore (approx) from Vodafone India before its merger with Idea Cellular. Idea share price extended losses after opening slightly lower on Monday on both NSE and BSE.
The stock of Idea Cellular dived as much as 7.1% to a 1-month low level of Rs 56.25 on BSE while the stock dipped 7.27% to a 1-month low of Rs 56.15 on NSE. This is the lowest level since 22 May 2018 when Idea Cellular shares hit a low of Rs 52.35 on NSE. On the trading counters, a heavy trading volume was seen in Idea shares on Monday following the news report. As at 10:42 am, more than 1.43 crore equity shares got exchanged on both NSE and BSE with about 1.3 crore equity shares being traded at NSE alone.
“Vodafone India had merged its all arm into one company and there are dues of around Rs 4,700 crore related to one-time spectrum charges (OTSC) on the company. DoT will ask Vodafone to either clear dues or furnish bank guarantee before merger with Idea,” PTI reported citing an unidentified source. Earlier in 2015, Vodafone merged its four subsidiaries namely — Vodafone Cellular, Vodafone Digilink, Vodafone South and Vodafone East with Vodafone Mobile Services.
In 2017, Idea Cellular and Vodafone India have announced the merger of their Indian operations last year following the inception of disruptive telecom venture Reliance Jio Infocomm Ltd. Post-merger, Idea and Vodafone India will be the biggest telecom firm in India with nearly a 40% of the market share. The name of the merged entity is likely to termed as Vodafone Idea Ltd which is subject shareholders’ approval of Idea Cellular.