Idea, Aircel plan Rs 2,600 cr IPOs

Telecom companies "" Idea Cellulur and Aircel Cellular "" have planned to enter the primary market with initial public offers (IPOs) of around Rs 2,000 crore and Rs 600 crore respectively.

Confirming the developments, merchant banking sources said the companies would float IPOs within a couple of months.

"In principle, they (Idea and Aircel) have decided the size of the issues to fund their expansion plans. However, the exact pricing and timing of the issues would be decided later."

According to the sources, the companies have planned to tap the markets as other modes of raising funds, including roping in strategic partners, have failed.

When contacted, the Idea officials offered no comments while the Aircel sources neither denied nor confirmed the move, adding that the IPO was one of the modes being looked at for raising money.

The move by Idea Cellulur and Aircel Cellular indicates that the lower-ranked Indian cellular companies are raring to go "" to enter the markets, while the top players are wary of being listed on the bourses.

Based on subscriptions, Idea Cellular and Aircel Cellular are placed at the fifth and the seventh position, respectively. The move assumes immense significance as among the top three companies that have notched over one crore connections, only Bharti Tele-Ventures is a listed entity.

According to the pecking order, Bharti is the second, while the leader Reliance Infocomm and Bharat Sanchar Nigam Ltd (both in the third position) are yet go the listing way. Hutch (including Hutch and Orange brands) with more than 90 lakh connections is ranked the fourth.

Idea Cellular with a 57-lakh subscriber base and operations in 11 circles ranks fifth, while Aircel with around 20 lakh users and operations in two circles (Chennai and Tamil Nadu) is in the seventh place. BPL with over 28 lakh connections occupies the sixth slot.

At present, the Aditya Birla group holds a 50 per cent stake in Idea Cellular, while Tata's holding in the company is around 48 per cent. Merchant bankers said the Idea IPO would reduce their shareholding proportionately. However, the number of shares to be tendered were not immediately known.

Earlier, Idea Cellular had planned for its IPO and a subsequent listing in 2004. However, this could come off, as AT&T Wireless, a partner of Idea at that time, had exited the venture by selling its stake to Cingular Wireless.

Idea Cellulur's IPO move followed an aborted attempt to offload 47.7 per cent stake by its stakeholders to Singapore Technologies Telemedia (STT) and Telekom Malaysia (TMI).

The Sterling group-owned Aircel Cellular has also failed to rope in a strategic investor. The Sterling group had commenced its operations with the acquisition of RPG Cellular, an operator in the Chennai circle, for Rs 208 crore about five years ago and renamed it as Aircel Cellular.

The group had also applied for mobile telephony licences in Uttar Pradesh (west and east), Bihar, Madhya Pradesh, West Bengal, Andaman and Nicobar, Orissa, Assam and the north-east circles.