Idea Will Become Vodafone Idea, India’s Largest Telco; Will Raise Rs 15000 Crore!
Vodafpne Idea will be India's largest telecom operator
We have got some exciting updates related with the merger of Vodafone and Idea, which will give birth to India’s largest telecom operator.
Vodafone Idea will be the new name!
However, some issues with spectrum persists, besides the massive loan amount.
Welcome to Vodafone Idea!
Shareholders of Idea Cellular have approved the change of name of their entity to Vodafone Idea, post their merger with Vodafone India.
The new telecom operator: Vodafone Idea shall be India’s largest telecom operator with almost 42% share of customers and 37% market revenue.
In a statement, Bombay Stock Exchange was informed by Idea Cellular: “Change in the name of the company and issue of non-convertible securities in private placement basis… passed with requisite majority,”
Note here: This new name and new entity shall be applicable only after Department of Telecom approves the merger between Vodafone and Idea.
Besides, the shareholders of both Idea and Vodafone have approved the fund raising by the new entity, which will help them to take on Jio and Airtel, and expand their collective services.
Overall, Rs 15,000 crore shall be raised, via non-convertible securities of both Idea and Vodafone.
While Idea has already raised Rs 6,750 crore from their existing investors, Vodafone has raised Rs 7,390 crore. Besides, they both have sold their captive tower business to American Tower Corp for Rs 7,850 crore.
Balesh Sharma has already been announced as the new CEO of the merged entity.
But Finances And Spectrum Issues Persist
Overall, Idea and Vodafone India have a combined debt of Rs 1.14 lakh crore, which needs to be taken care of. Rs 15,000 crore raised by these two entities will no doubt help them to cope with it.
Besides, DoT has raised a demand to pay Rs 11,000 crore in order to get the approval for merger, which can be challenged in the court. If the court rules against them, then the amount has to be paid immediately.
And, there is the issue of one-time spectrum charge (OTSC) as well. Idea Cellular will have to pay this charge on behalf of Vodafone, and also their own charges, which shall be 1/5th of the total amount.
One of the persons familiar with the development said, “The whole process may take about a month,”
In all probability, the June 30th deadline would be missed, as DoT has raised a fresh demand of Rs 4700 crore to be paid, and due to this, share prices of Idea Cellular dropped on June 25th.
However, once the announcement of new name: Vodafone Idea was made, Idea share prices increased by 3.02% to Rs 57.90.
We will keep you updated as we receive more news.