Axiata keen to raise stake in Idea Cellular: Report

NEW DELHI: Malaysian telecom player Axiata is keen to raise its stake in its Indian partner Idea Cellular once it receives permission from the promoters of Idea — the Aditya Birla group, reports ET Now.

Axiata’s stake in Idea is capped at 20.11%. It recently bought 29.78 mn shares (0.9% stake) at Rs103/share in the open market as per a pre-decided agreement, and with that it currently holds 20.0% stake in the company.

Axiata, which owns 20.11% stake in Idea Cellular Ltd, may think of exiting Idea if its stake remains capped at the same level and if it achieves reasonable returns on its investment in 5-7 years’ timeframe.

Axiata’s management stated that the India business is stabilising as competition is coming down and select operators are raising headline tariffs. Axiata considers Idea Cellular Ltd as one of the best performing Indian operators.

Last month, Idea Cellular, part of the Aditya Birla group, has cut its 3G data rates by 50-65% in MP, Kerala, Maharashtra, Delhi and Mumbai, five months after it launched such services.

“We see low possibility of any potential change in Axiata’s ownership at Idea in the near term and consider fundamental business drivers to be stock price catalysts for Idea going forward,” said a report by Goldman Sachs.

Axiata also ruled out any possibility of a third strategic investor in Idea. Recent media reports suggest that operators like Etisalat is also interested in acquiring stake in Idea. Axiata currently does not have a veto right.

On Tuesday, the company's shares closed 0.2% higher at Rs 98.60 on the BSE.