New Delhi: The National Company Law Tribunal has approved the proposed merger between Vodafone India Ltd and Idea Cellular Ltd to create India’s largest mobile wireless company, the latter said in a filing to the stock exchanges on Friday.

The two companies now require only the Department of Telecommunications’s approval to proceed with the merger, having already received the green signal from both the antitrust watchdog Competition Commission of India and the Securities and Exchange Board of India, in July. The merger will create the world’s second largest and India’s largest telco, overtaking Bharti Airtel Ltd.

It will have almost 400 million customers with 35% customer and 41% revenue market share. It will have revenue of Rs81,600 crore and an operating profit of Rs24,400 crore.

Vodafone Group and the Aditya Birla Group in March 2017 announced the merger, aimed at dominating a market that Mukesh Ambani’s Reliance Jio Infocomm Ltd had disrupted with free voice calls and low data prices following its commercial launch in September 2016.

The merger agreement is based on equal rights and equal shareholding between Idea Cellular’s promoters and Vodafone Group.

To achieve this, Vodafone has kept its 42% stake in Indus Towers Ltd, valued at around $5 billion, out of the deal’s purview. It can also contribute Rs2,500 crore more as debt into the merged entity.

Promoters of Idea Cellular Ltd on 4 January said they will invest Rs3,250 crore and the company plans to raise a similar amount to strengthen its balance sheet.

As a result of a change in Idea’s shareholding following the proposed capital raising, Aditya Birla Group and Vodafone agreed that the former will buy a minimum of 2.5% of the merged entity from Vodafone, or such stake as is required in order for it to ultimately own at least 26% of the merged entity, Vodafone said in a statement 4 January.

“Consequently, Vodafone will receive minimum proceeds of Rs1,960 crore (€256 million) from such sale and Vodafone’s ownership in the combined entity is expected to be approximately 47.5% at completion," it said.

Idea Cellular shares rose 1.35% on Friday to close at Rs108.60 on the BSE on a day the benchmark Sensex gained 0.26% to 34,592.39 points.

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