GLG Partners, a UK-based asset management company, has picked up 8 per cent stake in the Aditya Birla Group-owned Idea Cellular in a deal estimated at $213 million. Private equity investor, Providence Equity Partners, has acquired 15 per cent stake while TA Associates and ChrysCapital have bought a collective 8 per cent stake. Citigroup has purchased 2 per cent.
These deals, expected to be the group’s final equity dilution before its IPO in early 2007, will reduce its combined holding in Idea to about 65 per cent from 98.3 per cent. This deal is the first Asian investment for the US-based Providence and TA Associates. “Idea, a rapidly growing wireless carrier, is a good illustration of the type of company in which TA seeks to invest,” says CEO, Kevin Landry.
For ChrysCapital, this deal is the largest investment the company has made till date and its first in the telecom sector.
Idea Cellular’s shareholding has undergone several changes. Formerly, it was a joint venture between the Tatas and the Birla Group. This year the Birlas bought out the Tatas’ 48 per cent stake following ownership differences between the two.
Idea has been on a high-growth path. It recently crossed the 10 million subscriber mark. It has also launched mobile services in Uttar Pradesh (East), uniting this circle with Uttar Pradesh (West), where it has been the leader. With a presence in 11 circles and recent launches in Himachal Pradesh and Rajasthan, Idea has now spread its coverage to most parts of north, central and west India. The recent stake sale will provide Idea with the much-needed finances for future expansion.
As we go to press, there is news that the Aditya Birla Group has sold an additional 3.9 per cent stake in Idea Cellular to London-based Spinnaker Capital, Australia’s Macquarie and other FIIs.
