Idea Cellular jumps 2% as firm mulls consolidation in tower biz

Shares of Idea Cellular climbed 2 per cent in Wednesday’s trade on reports the company is planning to reorganise its telecom infrastructure and towers business.

The move will help the company to simplify its holding structure by consolidating its scattered tower holdings into a single entity and unlock value, the ET reported.

Following the development, the stock rose 1.66 per cent to hit a high of Rs 82.40. Aditya Birla Group stocks Grasim and Aditya Birla Nuvo inched up 0.4 per cent each.

Idea Cellular owns 11,000 captive towers via a wholly owned arm Idea Cellular Infrastructure Services (ICISL). It also has 16 per cent stake in Indus Towers, Aditya Birla Telecom’s telecom tower JV with Airtel and Vodafone. Idea Cellular has 86 per cent stake in Aditya Birla Telecom.

The company is looking at many options, including the one where Idea will divest a 49 per cent stake in ICISL and its entire holding in Indus Towers. The company has mandated Bank of America Merrill Lynch (BAML) to help in bringing in a new financial investor, said multiple sources aware of the ongoing discussions, the ET reported.

KM Birla may alternately look to merge ICISL into ABTL to create a single entity that will hold 100 per cent of Idea’s captive towers and 16 per cent of Indus and then dilute a 49 per cent stake to financial sponsors in that combo.