Axiata, one of Asia’s leading telecommunications group is keen to sell its 20% stake in Idea Cellular as the Malaysian company believes that with the entry of Reliance Jio Infocomm, Idea’s provider valuation will be subdued for the next three years.
Axiata has passed a board resolution to sell its stake in Idea, said one person, although that couldn’t be independently verified , The Economic Times reported. Axiata has investments in mobile network operations, network infrastructure and digital internet companies, serving almost 300 million subscribers in 10 countries across the region.
Formerly Telekom Malaysia, Axiata had originally asked Idea’s parent, the Aditya Birla Group to buy the holding but was turned down. The Malaysian company is said to have informally asked the investment bankers to seek buyers for the stake.
Estimated share value of Idea Cellular on Axiata’s books is fixed at a rate of at Rs. 155 per share, whereas last year Idea Cellular’s closing price was Rs. 79, down from a record of Rs. 145.
An investment banker, in a statement to The Economic Times, said that the buyers for a minority stake in an Indian telecom company may be hard to come by as there may be more interest in a majority stake.
Axiata’s 20% was earlier declined by the Aditya Birla Group, a few years earlier. Forty two of the Idea Cellular is controlled by the Birla Group, while the rest is controlled by institutional and retail investors.
Idea Cellular is part of the Aditya Birla Group that provides Global System for Mobile communications (GSM)- based wireless services and is present in all 22 telecom circles. It also offers 2G, 3G and 4G mobile services.