Telecom operator Idea Cellular shares fell more than 2 percent on Wednesday after a media report indicated that Axiata, the major public shareholder other than promoter and promoter group, is likely to sell its entire stake.
"Axiata is looking to sell its 20 percent stake in Idea Cellular as the Malaysian company believes the Indian telecom provider's valuation will remain subdued for at least the next three years given the likelihood of a pricing onslaught stemming from the entry of Reliance Jio Infocomm," a media report said, quoting three people familiar with the plan. (Disclosure: Reliance Industries, the parent company of Reliance Jio, owns Network 18 that publishes Moneycontrol.com)
According to the report, the Malaysian company is said to have informally asked investment bankers to seek buyers for the stake. Formerly Telekom Malaysia, Axiata had originally asked Idea's parent, the Aditya Birla Group, to buy back the holding but was turned down.
Axiata Investments 2 (India) and Axiata Investments 1 (India) held 6.87 and 12.91 percent stake, respectively as of September 2016.
The profit-booking could also be the reason for weakness. The stock rallied 4.4 percent in previous session after sources told CNBC-TV18 that the company is likely to sell entire stake in its tower subsidiary.
At 12:16 hours IST, the stock was quoting at Rs 77.35, down Rs 1.80, or 2.27 percent on the BSE.