Malaysia's Axiata Hikes Stake In Idea Cellular To 19.98%

Malaysian telecom firm Axiata (formerly known as Telekom Malaysia) has raised its holding in India's fourth largest telco Idea Cellular to 19.98 per cent by acquiring an additional 0.9 per cent stake through open market purchases in a deal worth Rs 306.69 crore ($67.5 million) earlier this month.

Axiata Investments 2 (India) Ltd acquired 29.7 million shares at a price of Rs 103 a piece, according to a disclosure to the stock exchange. Axiata held as much as 19.08 per cent in Idea Cellular as of June 30, 2011, through two entities.

Bulk of these shares was acquired through a preferential allotment three years ago at a price of Rs 156.9 per scrip. Axiata also held stake in Spice Communications, which was acquired by Aditya Birla Group-led Idea Cellular three years ago. Idea Cellular is also backed by the private equity giant Providence.

Idea Cellular scrip rose 2.16 per cent to close at Rs 94.45 at the BSE on Wednesday.

The latest disclosure also quells the rumours doing the rounds earlier this year that Axiata was looking to sell up to 5 per cent of its stake in the Indian telco and was in talks with private equity firms for the same.

Incidentally, late last month, private equity firm ChrysCapital sold almost its entire 2.7 per cent stake in Idea Cellular for Rs 751 crore ($170 million) through an open market sale of shares.

ChrysCapital held 2.7 per cent stake in Idea Cellular through an entity Monet Ltd, as of June 30, 2011. The investment firm sold 2.5 per cent of its holding in the last week of July.

ChrysCapital sold its stake at Rs 90 per share. Ashish Dhawan-led ChrysCap had invested around Rs 500 crore in Idea Cellular five years ago, before the initial public offer (IPO) of the firm. This was around the same time when Providence invested over $400 million in Idea Cellular in one of the biggest private equity deals in the country.

These transactions come at a time when telecom stocks have shot up over the past few weeks, based on the news of tariffs moving up.