Country's third-largest telecom operator Idea Cellular has received shareholders' approval for increasing the investment limit for overseas investors to 49 percent, according to sources.
"Increase in FII investment limit has been approved by shareholders of Idea Cellular at the Extraordinary General Meeting (EGM) held on December 26 ," sources aware of the development said. Idea Cellular declined to comment on the matter. The Aditya Birla group company's move seeking nod for hiking the cap comes ahead of the next round of spectrum auctions scheduled to be held in February 2014.
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The Idea board has already passed an enabling resolution to raise funds of upto Rs 3,000 crore through the Qualified Institutional Placements route. FII investments in the company was capped at 24 percent of the paid up equity share capital of the company.
At current market valuations, 49 percent of stake Idea Cellular is worth Rs 27,225.38 crore. It shares on BSE closed at Rs 167.45 apiece on Friday. At present, FII share holding in the company is about 17.95 percent of the paid up capital. Holding of overseas investors in the company has consistently risen in the past few quarters.
At the end of September 2013, Idea Cellular promoters held 45.85 percent stake in the company. TMI Mauritius (14.01 percent), P5 Asia Investments Mauritius (9.95 percent), Axiata Investments 2 India (5.89 percent), Vanguard International Growth Fund (1.05 percent) and National Westminster Bank (1.01 percent) were among the shareholders which held over one percent stake in the telecom firm on September 30.
Idea is a pan-India integrated GSM operator offering 2G and 3G services, and has its own National Long Distance (NLD) and International Long Distance (ILD) operations, and Internet Service Provider (ISP) licence. It had a revenue market share of nearly 15 per cent and subscriber base of over 121 million in FY'2013.
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