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Idea Cellular: Buy Investments with a two-year horizon may be considered in the shares of Idea Cellular (Idea), given the telecom operator’s strong pace of subscriber additions, entry into circles with higher realisations and synergies possible from Indus Towers. Pressures on near term margins and earnings due to entry into new circles and high capital expenditure have seen the stock’s valuation being beaten down to a moderate 13 times forward earnings (estimated 2008-09). At Rs 48, the stock offers a good investment option for investors who are willing to look beyond the next few quarters, for appreciation over a 3-4 year time frame. Once Idea’s capex in new circles tapers off (likely by mid 2010), its overall profitability would start to expand. Mobile number portability, on the anvil for 2009, may also work in Idea’s favour. Idea’s profit margins over the last couple of quarters have come under strain, due to the capex for network rollout in Mumbai and Bihar, heavy rentals for tower...

Aditya Birla Group firm Idea Cellular on Wednesday said it has acquired about 41 per cent stake in Spice Communications through open market and block trade transactions. Idea Cellular has acquired 20 lakh equity shares, representing 0.29 per cent in Spice Communications at an average market price of Rs 74.81 each through open market transactions, the company said in a filing to the Bombay Stock Exchange. Further, Idea Cellular through a block trade has acquired over 28.14 crore equity shares, representing 40.80 per cent, at a price of Rs 77.30 per piece, it added. However, acquisition of these shares has not been completed and is held in separate escrow accounts. The acquirers of these shares would get the shares after fulfilling all its obligations under the SEBI Regulations, the filing added. Earlier on June 25, Idea Cellular, the fifth-largest mobile operator in terms of subscribers, had said it would acquire 40.8 per cent stake in B K Modi-owned Spice group for Rs 2,716 crore. The ...

Idea Cellular along with Persons Acting in Concert (PACs), including Telekom Malaysia International (TMI), TMI Mauritius, TM International Berhad and Green Acre Agro Services have made the open offer for a further 20 per cent stake in Spice Communication s. Idea Cellular along with the PACs have made the open offer for acquiring up to 137,985,050 equity shares representing 20 per cent of the paid-up equity share capital of Spice Communications at Rs 77.30 each. The open offer would start on August 22, and would close on September 11, the company said in a filing to the Bombay Stock Exchange. Earlier on June 25, Idea Cellular, said it would acquire 40.8 per cent stake in B K Modi-owned Spice group for Rs 2,716 crore. The Birla group company had said it would merge Spice with itself through a share swap, where Spice shareholders would get 49 Idea shares for every 100 Spice shares held. In the morning trade, Idea shares were trading at Rs 97.10, down 0.36 per cent, while Spice Communicati...

Idea Cellular has signed a deal to acquire Spice Comm. Idea will pay Rs 2,716 crore for 40.8 per cent stake in cash and stock

US-based Providence Equity Partners has picked up 20 per cent stake in Aditya Birla Telecom (ABTL), a subsidiary of Idea Cellular, for $640 million (Rs 2,748 crore). ABTL owns a telecom licence for the Bihar service area and it is all set to launch GSM services there in the next three-four months, said Mr Sanjeev Aga, Managing Director, Idea Cellular. ABTL will issue compulsorily convertible preference shares aggregating $640 million to an affiliate of Providence Equity Partners. On conversion, Providence will have 20 per cent stake in ABTL, Idea said in a communication to the stock exchanges. This is said to be one of the largest private equity investments in the telecom sector. A major portion of the fund raised from the stake sale will be utilised for launching telecom services in Bihar, Mr Aga told presspersons here on Thursday. The stake sale to the Rhode Island-based Providence values ABTL at 13,744 crore, according to an analyst. The deal, which is subject to FIPB approval, is e...

Analysts' picks: M&M Finance, Idea Cellular, Tulip IT Services, Tata Motors (The Economic Times 26th Feb 2008) M&M Finance Research: Prabhudas Lilladher Rating: Outperformer CMP: Rs 310 Target: N/A Sobha Developers Research: Morgan Stanley Rating: Overweight CMP: Rs 811.85 Target: Rs 1,172 Idea Cellular Research: UBS Securities Rating: Accumulate CMP: Rs 112.20 Target: N/A Tulip IT Services Research: Networth Stock Broking Rating: Buy CMP: Rs 1,012 Target price: Rs 1,348 Tata Motors Research: Networth Stock Broking Rating: Neutral CMP: Rs 702.1 Target price: Rs 764 Gateway Distriparks Research: Merrill Lynch Rating: Buy CMP: Rs 116.85 Target price: Rs 175 Details

The Department of Telecom on Thursday issued letters of intent to Tata Teleservices, Loop Telecom (owned by BPL), Spice Communication, Shyam Telelink, Swan Telecom, Datacom, Idea Cellular, Unitech and STel. It has also also issued a letter of intent to Tata Teleservices in 20 circles to operate GSM-technology services under the crossover technology policy. DoT issues 9 LoIs, gets over Rs 6,500 crore as licence fee (Business Stndard 11th Jan 2008) Amid tight security and an altercation with HFCL chief Mahendra Nahata at Sanchar Bhawan, headquarters of the Department of Telecom (DoT), nine companies among 45 applicants were offered letters of intent (LoIs) for unified access service licences (UASL). Within hours, a number of these companies paid the required fees and were allotted licences, but not the spectrum, the radio frequencies that enable wireless communications. Among them were BK Modi’s Spice (which received only four licences though it had applied for 20), Idea Cellular, Tat...