Idea Cellular plans IPO by March

The Aditya Birla group will infuse Rs 550 crore in Idea Cellular by March-end next year as part of a deal with its bankers to fund the Rs 4,406 crore takeover from the Tatas.

The Aditya Birla group will infuse Rs 550 crore in Idea Cellular by March-end next year as part of a deal with its bankers to fund the Rs 4,406 crore takeover from the Tatas.

The Rs 550 crore kitty could come via an initial public offer or through subordinated debt 8212; bank loans which rank below other loans with regard to claims on assets 8212; or both, company officials said on Thursday.

Officials say the group has pledged 51 per cent of Idea8217;s shares with a slew of bankers including IDBI to raise funds before the company can hit the capital markets. The group also spiked plans to bring in any financial investors before the IPO hits market.

8220;We have the option to raise capital by way of a subordinated debt or through an IPO. We have not finalised that IPO as yet,8221; Aditya Birla Nuvo MD, Sanjiv Aga told The Indian Express today.

According to sources, on a turnover of Rs 2,989 crore, the company has seen its profits rise by 179 per cent to Rs 212 crore for fiscal 2006.

Idea Cellular itself needs funds to expand operations and is planning to roll out services in Rajasthan, Himachal Pradesh and eastern UP by this year-end and enter the Mumbai market soon after. The company has a presence in Maharashtra, Gujarat, Madhya Pradesh, Andhra Pradesh, Delhi, Kerala, Haryana and western UP. With 9.7 million subscribers as on August 31, 2006, it is India8217;s fourth largest wireless phone operator.

In June, the Aditya Birla group had bought the Tatas8217; 49 per cent stake in Idea Cellular after an acrimonious battle over the valuation of Idea shares. The Birlas even complained to the Department of Telecom against Tata8217;s shareholding pattern saying it violated licensing norms. The complaint has been withdrawn now after the companies signed the deal.