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Jayanta Mallick

Kolkata , Dec. 15

The three Aditya Birla Group companies - Aditya Birla Nuvo Ltd, Grasim Industries Ltd and Hindalco Industries Ltd - collectively own a little over 53 per cent stake in Idea Cellular. This is revealed in the red herring prospectus filed with the Securities and Exchange Board of India in connection with the company's forthcoming public issue of capital.

According to the Idea Cellular draft IPO offer document, shareholding of the three listed companies reads: Aditya Birla Nuvo Ltd 35.74 per cent, Grasim Industries 7.6 per cent and Hindalco Industries 10.1 per cent.

Pays different price

The valuation for different portions of the total stake - both for acquisition and later placements - by the group entities varied not only in terms of time, but also the rate (that is price per share).

For example, Aditya Birla Nuvo acquired 16.5 per cent stake in September 2005 for Rs 660.70 crore. But it paid Rs 1,372.70 crore for another 15 per cent in the first quarter of FY-2007 - the quarter to June 30, 2006. The last purchase took Adity Birla Nuvo's holding to 35.74 per cent from 20.74 as on March 31, 2006.

Incidentally, Birla Communications Ltd, now Idea Cellular, underwent several drastic changes in the shareholding in its 10-year existence. After the Tata group sold their stake at different points in time and finally exited the company early in the first quarter of 2006-07, the 100-per cent ownership had passed to the Birla group.

The emerging clarity on shareholding pattern in Idea Cellular among the Aditya Birla group companies should provide a new framework for the valuation of the these group companies as telecom investments command a fair premium in earnings multiple given the growth potential in this sector, say analysts on Dalal Street.

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