Idea likely to launch IPO by month-end

Telecom operator Idea Cellular said it is on track with its plans to raise Rs 2,500 crore through its initial public issue and plans to clear all formalities by the month-end

The IPO marks the entry of the Aditya Birla group into the public market after nearly a decade.

Idea Managing Director Sanjeev Aga refused to divulge any plans of inducting foreign investors or raising the FDI beyond the current composite 47 per cent foreign holding in the company.

The Aditya Birla venture had recently got approval from the Foreign Investment Promotion Board (FIPB) for 74 per cent foreign direct investment (FDI) in Idea.

The telecom policy was amended to allow 74 per cent FDI, up from 34 per cent with an FIPB clearance.

Idea has filed its red herring prospectus with the Securities and Exchange Board of India (Sebi) for the book-built IPO.

Idea has already divested 33 per cent stake to handful of investors such as US-based Providence Equity Partners, ChrysCapital, UK-based TA Associates, GLG Partners and Citigroup.

Taking into account the foreign institutional investors (FII) in the group companies as required by the new telecom policy, the company has divested 47 per cent and the remaining equity is with the promoter company, Aditya Birla.

"The funds gathered from the IPO will be used to roll out the Idea network in the Bihar and Mumbai circles by mid-2007 and to go mainstream with its National Long Distance licence in the next three months, besides expanding its reach in the existing circles," Aga said.

With an objective of becoming a market leader in 13 circles, which it intends to operate through organic growth once listed, Aga admitted the company had better chances for inorganic growth also.

"If we come across the right opportunity, we would look at inorganic growth," said Aga.