The Aditya Birla group has reversed its decision of exiting from Idea Cellular, the three-way mobile telephony joint venture with the Tatas and the US-based AT&T.
The three promoters had now decided to infuse an additional Rs 600 crore as equity to strengthen company's operations and to finance future growth, sources close to Idea Cellular said. The decision was taken after deliberations between the promoters here yesterday.
The Birlas have been scouting for buyers to sell the group's 33 per cent stake in the cellular company after a review of the group's diversified businesses last year.
But it was facing problems in identifying a buyer, with concerns on the valuation of the stake following the introduction of a fourth cellular licensee and limited mobility services in the market.
Birla executives did not comment on the issue. "Telecom is not the core business for the Birla group and they are not in need of any funds. However, they have been scouting for buyers even as there have been differences in the valuation of their stake," sources close to the promoters of Idea Cellular said.
The Birlas are understood to have asked around Rs 20 a share for their stake, which found no takers.
"Considering the commitment by the Birlas, the company is now gearing up to compete with other GSM (global system for mobile) players in the market. We have now agreed to invest around Rs 600 crore in Idea Cellular and consolidate the growing GSM market," they added.
For the Birlas, it has been difficult to find a buyer for their stake as both the Tatas and AT&T are not keen to exercise their first right of purchase.
AT&T, which has a 33 per cent stake, is also constrained by the 49 per cent foreign investment cap in the sector.
Idea Cellular today announced an investment of Rs 200 crore in the Maharashtra and Goa circle.
