Idea Cellular plans IPO

Idea Cellular plans for an early listing to raise equity as Cingular Wireless, its foreign stakeholder, is to retain its stake in the company.

The move comes in the wake of its aborted attempt to offload 47.7 per cent stake to a consortium led by Singapore Technologies Telemedia (STT) and Telekom Malaysia (TMI).

The move for an initial public offering (IPO) has gathered momentum as the stakeholders "" US-based Cingular Wireless, Tatas and Aditya Birla Group "" are looking at alternative modes for infusion of equity into the company, merchant banking sources told Business Standard.

The company is also actively scouting for strategic partners. However, stakeholders are of the opinion that an IPO would be the ideal vehicle as the company has a good reputation, subscriber base and valuation.

Idea Cellular is the fifth-largest mobile-phone company in the country and has over 5.4 million subscribers, they said.

A number of foreign investors have also evinced interest in the company as the stakeholders held sell-off talks.

"Stake sell off would be the first method for raising equity and IPO would be the next option," they said.

Idea was planning for an IPO in 2004 and a subsequent listing. The company's IPO plans received a jolt as AT&T Wireless had exited from the joint venture by selling of its 32.9 per cent stake to Cingular Wireless. Details of the proposed IPO was not finalised at the time, with the company only planning to announce the dates.

Now with Cingular's plans to offload its stake hitting regulatory hurdles, as the consortium led by STT and TMI has stake in competitor AirTel, the company is planning to retain its stake in Idea, they said.

If the deal would have been approved, the consortium would have bought out Cingular's 32.9 per cent stake, 6.7 per cent stake of Aditya Birla group (of the total 33 per cent) and 8.3 per cent (of 33 per cent) from Tata group.

Meanwhile, sources in the Tata Group said that the group would buy out Cingular's stake, in case the company still wants to exit from the venture and "if it is suitable".