Idea Cellular shares extend fall, down nearly 8% on Vodafone deal

By Selene 0

New Delhi: Continuing to fall for the second straight session on Tuesday, Idea Cellular stock plunged nearly 8% after it agreed to merge with Vodafone India to create the country’s largest mobile phone operator worth more than $ 23 billion.

Even after a positive opening, the stock failed to hold on the momentum and lost 7.63% to Rs90.15 as the trade progressed on BSE.

On NSE, shares of the company tanked 7.77% to Rs90.10. In the previous session also, the stock had lost nearly 10%.

The British firm will own 45.1% of the merged entity while the Aditya Birla group, Idea’s parent company, will own 26% after paying Rs3,874 crore cash for a 4.9% stake, the two firms announced at a press conference on Monday.

The remaining 28.9% will be held by other shareholders.

The Idea-Vodafone merger will create a strong player, but multiple challenges from the deal, including breach of spectrum holding and revenue marketshare cap, will have to be resolved in a fixed timeframe, ICRA said on Monday.

Analysts are of the view that the competition in the industry is unlikely to subside in the medium term despite the mega merger.

First Published: Tue, Mar 21 2017. 01 04 PM IST