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4 pvt equity firms pick 24% stake in Idea

Our Bureau

Mumbai , Oct. 27

A consortium of four private equity firms have acquired 24 per cent stake in Idea Cellular, a GSM wireless operator whose majority ownership is with the AV Birla group.

Providence Equity Partners Inc, TA Associates, ChrysCapital and Citigroup have together acquired 24 per cent stake in the company, confirmed Mr Bharat Banka, co-head, Group Finance, AV Birla group, on Thursday.

Big Deal?

Officials at AV Birla refused to discuss the size of the deal, citing `silent period' restrictions since Idea was being readied for an IPO in three months' time. However, agency reports, quoting unnamed sources said that Providence Equity's 15 per cent stake in Idea involved an investment of $400 million.

This would mean that the transaction values Idea at nearly $2,666 million or nearly Rs 12,000 crore, a 30 per cent jump in valuation from the last transaction in the company, said an analyst.

In April, the AV Birla group had acquired 48.1 per cent stake from the Tata group for Rs 4,406 crore, a transaction that set Idea's valuation at Rs 9,200 crore.

Before Thursdays' deal, the AV Birla group owned 98 per cent stake in Idea Cellular.

When the group announced its buyout of the Tata group in Idea, Aditya Birla Nuvo and its subsidiaries were to get 15 per cent stake in Idea, and the unlisted company Birla TMT Holdings Pvt Ltd to get the remaining 33.14 per cent stake that was said would be placed with financial investors "on the same terms".

IPO plans

Idea will probably make an initial public offer in the first quarter of the next calendar year, said officials. This values Idea at around Rs 9,200 crore, according to analysts.

Idea is a GSM cellular operator and is the fifth largest wireless operator in India in subscriber base.

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