Idea Cellular gains after inking spectrum trading pact for two telecom circles

Idea Cellular gained 0.75% to Rs 140.90 at 10:35 IST on BSE after the company signed a pact with a Videocon Industries' subsidiary for acquiring the right to use the latter's spectrum in the Uttar Pradesh (West) and Gujarat circles for Rs 3310 crore.

Idea Cellular and Videocon Industries made the announcement after market hours on Tuesday, 24 November 2015.

Meanwhile, the S&P BSE Sensex was up 154.60 points or 0.6% at 25,930.86.

On BSE, so far 2.16 lakh shares were traded in the counter of Idea Cellular as against average daily volume of 3.01 lakh shares in the past one quarter.

The stock hit a high of Rs 142 and a low of Rs 136.60 so far during the day. The stock had hit a record high of Rs 203.90 on 17 April 2015. The stock had hit a 52-week low of Rs 127 on 10 November 2015.

The stock had outperformed the market over the past one month till 24 November 2015, dropping 0.43% compared with Sensex's 6.17% fall. The scrip had, however, underperformed the market in past one quarter, declining 4.8% as against Sensex's 0.13% rise.

The large-cap telecom company has equity capital of Rs 3599.61 crore. Face value per share is Rs 10.

Meanwhile, shares of Videocon Industries gained 4.91% to Rs 136.70.

The final consideration of Rs 3310 crore is subject to adjustment based on the due diligence exercise. The spectrum trading arrangement is for 1800 MHz spectrum, with the right to use the spectrum until December 2032. Idea said it intends to use this acquired spectrum for launching 4G (LTE) mobile broadband services in the two service areas of Gujarat and Uttar Pradesh (West). With this spectrum trading arrangement, Idea's 4G (LTE) spectrum footprint will expand to 12 service areas covering over 75% of Idea's current revenue and over 72% of existing 170 million quality subscribers on visitor location register (VLR).

Idea Cellular's consolidated net profit rose 7.1% to Rs 809.26 crore on 14.7% rise in net sales to Rs 8676.58 crore in Q2 September 2015 over Q2 September 2014.

Idea Cellular is one of the leading telecom operators in India. It is a part of the Aditya Birla Group.

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