Idea Cellular slips 10% on PE stake sale

Providence Equity Partners sold 1.25 million shares amounting to a 3.47% stake in Idea Cellular, at Rs 110.65 apiece for a total value of Rs 1,383 cr

Shares of telecom operator Idea Cellular slid sharply on the bourses after seeing a series of block deals.

Private equity firm Providence Equity Partners sold 1.25 million shares amounting to a 3.47 per cent stake in Idea Cellular, at Rs 110.65 apiece for a total value of Rs 1,383 crore, exchange data showed. The chief buyer was Morgan Stanley Asia (Singapore), which bought 66 million shares at Rs 110.4 apiece for a total of Rs 736 crore. The fund reportedly hired investment banker Morgan Stanley to manage the share sale.

As of the quarter ended March 2016, Providence held 6.8 per cent stake in the Idea Cellular through its investment subsidiary P5 Asia Investment (Mauritius), data put up on the BSE website show. Providence had bought 15 per cent in Idea in 2006 for around Rs 1,800 crore and diluted eight per cent in the stock in the course of the next few years.

On Friday, Idea Cellular shares opened at Rs 113.5, down 4.1 per cent over its previous closing on the BSE. It touched a low of Rs 104.85 before closing at Rs 106.55, down 9.97 per cent over the previous day’s close. As many as 26.28 million shares of Idea Cellular changed hands, more than 50 times the two-week average of 450,000 shares. On the National Stock Exchange, the stock closed lower by 11 per cent.

In the past one year, shares of Idea Cellular have plunged 39 per cent on the BSE in a period when the Sensex has remained flat.

For the quarter ended March 31, 2016, the company reported a consolidated net profit of Rs 575.6 crore, down 38.8 per cent from Rs 941.7 crore in the year-ago quarter.