Idea Cellular to go in for IPO in February

Bangalore, Jan 11 (UNI) Idea Cellular, a major mobile operator in the Hindi heartland, will come out with an IPO next month to raise about Rs 2,875 crore to fund its expansion of business, meet the capital expenditure and redeem preferential shares to the tune of Rs 600-700 crore.

In a chat with the media here, company Managing Director Sanjeev Aga said the issue, which included the 15 per cent Green Shoe option to the tune of Rs 375 crore, would be done under the 100 per cent book building procedure.

Despite infusion of the new equity, the company would remain a purely Aditya Birla group company as the group would continue to hold more than 50 per cent stake in the one billion dollar company.

''A major part of the proceedings from the IPO would help us fund the expenditure towards license fee for the national long distance network we are launching shortly and redeem the longstanding preferential shares to the tune of Rs 600-700 crore,'' he said.

Mr Aga said the company would be entering new markets in Himachal Pradesh, Eastern Uttar Pradesh and Rajasthan within two weeks. Its applications to enter markets like Karnataka, Tamil Nadu, Bengal and the North East were pending with TRAI.

Idea, which had a national share of 8.4 per cent, was the third biggest player in the Hindi heartland, that included Uttar Pradesh, Haryana, Delhi and Madhya Pradesh. It also had a major presence in Gujarat, Maharashtra, Andhra Pradesh and Kerala, he said.

For the year 2006, the company's gross revenues stood at Rs 2,973 crore and EBIDTA had improved to Rs 1,083 crore. With the Aditya Birla group taking over the management control, Rs 1,600 crore was spent on expanding and rolling out services in all the eleven circles. This had helped the company add a new subscriber base of 2.99 million in just six months between March and September 2006, taking the total subscriber base to 10.36 million, Mr Aga said.

The capex of the company was estimated at Rs 4,000 crore. After making impressive gains in the last two years, the company was fast wiping off its accumulated losses of about Rs 1,600 crore, he added.

UNI