An unnamed source told Bloomberg that Idea Cellular Ltd's planned stock sale had been pushed to next year instead of this month. Two people who were also familiar with the company decisions said the mobile phone operator owned by billionaire Kumar Mangalam Birla was to start the sale of its shares to institutional investors was originally scheduled to be completed this month. The sources also added that Idea Cellular was aiming to raise up to INR30 billion or USD481 million from the sale. One of the sources said the top two mobile phone operator in India planned to price its shares for the stock sale for at least INR190 per share.
All sources refused to be named as deliberations about the stock sale were private.
Bloomberg highlighted an issue between mobile phone providers and the Indian government over airwaves costs. Moody's Investor Services said earlier this month that the biggest wireless carrier in India Bharti Airtel Ltd was facing risks due to rising costs in renewing airwave licenses. A telecommunications ministry panel in India gave its recommendation to increase prices of airwaces to be sold in January by as much as 25% over prices that were recommended by industry regulator Telecom Regulatory Authority of India back in September. The proposal has yet to receive approval from a consortium of government ministers, Bloomberg said in its report.
Mumbai-based Nirmal Bang Institutional Equities analyst Harit Shah said, "(Idea) could be waiting for clarity on all these spectrum-related issues. They would look at financing only to fortify their balance sheet and for the spectrum renewal."
In an earnings conference call last October 25 Idea Managing Director Himanshu Kapania saidm referring to the planned float, "We have time for one year. We're closely watching the situation and we will evaluate the overall scenario and then take a call" on the timing and the size of the sale, he said then.
Mumbai-based analyst Urmil Shah at Kim Eng Securities Ltd noted, "There is still some uncertainty over the auction front. They are likely waiting for clarity on the price and timing of the auction."
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