The Hindu Business Line : IDEA Cellular eyes IPO market for expansion

TAPPING NEW MARKET:: Dr Kumar Mangalam Birla, Chairman, IDEA Cellular Ltd, with Mr Sanjeev Aga, MD, at a press conference to announce the company's IPO in Mumbai on Monday. - Paul Noronha

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Mumbai Feb. 5

IDEA Cellular will use the proceeds of its initial public offering to establish an expanded footprint by the end of the current year; it will also use about 35.6 per cent of the issue proceeds for redemption of preference shares issued by the company.

The objective of the issue is to build, strengthen and expand the company's network, said Dr. Kumar Mangalam Birla, Chairman of IDEA, at a news conference here today.

Earlier the company had been undercapitalised, he noted. The investments it had made were not of the magnitude and scale of some of the other operators, added Mr Sanjeev Aga, MD, IDEA Cellular. As a result its marketshare was in a state of gentle decline which saw a reversal only in early 2006, he said.

IDEA will spend Rs. 970 crore on upgrading its existing network in 11 circles and Rs. 647 crore on establishing Mumbai operations. Around Rs. 756 crore will be utilised from the issue for redemption of preference shares. IDEA will largely concentrate on organic growth, said Mr Aga.

The IPO which is at a price band of Rs 65-Rs 75, can raise Rs 2,125 crore and additionally Rs 375 crore if the green-shoe option is exercised. It opens on February 12 and closes on February 15.

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