Idea Cellular plunges after block deal

Idea, the third largest mobile operator by subscriber base with the famous tagline “What an idea Sirjee”, does not seem to identify with the brand as regards its latest block deal.

Providence Equity Partners, the stake holder in Idea has sold its stake upto 3.47 per cent at a price of 110.65 per share on Friday. The total sold value amounted to Rs 1383 crores. Providence had bought 15 per cent in Idea in 2006 for around Rs 1800 crores and had diluted eight per cent in the stock in the course of the next few years. As of the quarter ended March 2016, Providence held 6.8 per cent stake in the Idea Cellular through its investment subsidiary P5 Asia Investment (Mauritius).

The outcome of the deal took a sharp toll on the company’s share prices. The share on Friday opened lower. The stock hit an intraday low of Rs.104.85 and fell as much as 11.4 per cent its sharpest decline since April 2012. So far this year, the stock is down by 25.88 per cent.

Idea Cellular is an Indian mobile network operator based in Mumbai, Maharashtra. Idea is a pan-India integrated GSM operator offering 2G, 3G and 4G mobile services. Idea has 182 million subscribers as of 31 December 2015.

For Q4FY16, the company has reported a consolidated net profit of Rs 575.6 crore, which was down by 38.8 per cent from Rs 941.7 crore as compared to Q4FY15.

The major buyer in the deal was Morgan Stanley Asia (Singapore), which bought 66 million shares at Rs 110.4 per share for a total amount of Rs 736 crore.