Idea Cellular shares soar as Vodafone deal clears hurdle
Idea’s shares rose to as much as ₹61.25 in afternoon trading, clocking their biggest intraday percentage gain since 31 January 2017
Bengaluru: Shares of Idea Cellular Ltd surged 16.6% to their highest in over a month on Tuesday, after the operator paid the department of telecommunications (DoT) money it had demanded relating to its merger with Vodafone’s India unit.
The DoT, under conditional approval for the merger, had asked both firms to clear the dues, a move that could have potentially delayed the deal.
Idea paid ₹3,926 crore and a bank guarantee of ₹3,322 crore to the DoT, a company official told Reuters.
“The payment by Idea is a clear indication that there will be no further delays to the merger,” an analyst with a Mumbai-based brokerage who did not wish to be identified, said. The move comes days before Idea’s first-quarter print, which is scheduled for Monday, 30 July. Merger talks are expected to take centre stage during the discussion, and investors will push for more details on the timeline of completion, the analyst said.
Idea and Vodafone signed a merger agreement last year, creating the country’s biggest telecom operator. The merger follows a broader trend of consolidation in the telecom sector amid a price war sparked by the entry of Reliance Jio.
Idea’s shares rose to as much as ₹61.25 in afternoon trading, clocking their biggest intraday percentage gain since 31 January 2017. The stock later pared gains to end the day up 7.31% at ₹56.50. The Sensex closed up 0.29% at 36,825.10 points.
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