Idea Cellular stock rises up to 6% on completion of merger with Vodafone India
The stock rose to an intra day high of 53 level, rising 6 percent in early trade compared to previous close of 49.85 level. The large cap stock is trading 3.68% away from 52 week low of 48.40.
The Idea Cellular stock rose in trade today a day after the completion of merger with Vodafone India. At 1:01 pm, the stock was trading 0.80% higher at 50.25 level on the BSE.
The stock rose to an intra day high of 53 level, rising 6 percent in early trade compared to previous close of 49.85 level.
The large cap stock is trading 3.68% away from 52 week low of 48.40. It has fallen 53% since the beginning of this year and 44.78% during the last one year.
Idea Cellular board has allotted 3.9 million shares to Vodafone India. Vodafone said combined entity will be renamed Vodafone Idea shortly and will remain listed on the Indian stock exchanges. Vodafone said chairman of board of Vodafone Idea is Kumar Mangalam Birla and appointed former Vodafone India COO, Balesh Sharma, as CEO.
The merger will create India's biggest telecom service provider with over 408 million subscribers, the two companies said. The combination will have all India revenue market share of 32.2 per cent and take the numero uno slot in nine telecom circles, it said adding that both Vodafone and Idea brands will continue.
The telecom giant will topple Bharti Airtel from its current pole position, and will have the firepower to take on competition in the Indian telecom market, which has intensified with the aggressive entry of Reliance Jio. It will have a broadband network of 3.4 lakh sites and distribution network with 17 lakh retail outlets.
"The merger is expected to generate Rs 14,000 crore annual synergy, including opex synergies of Rs 8,400 crore, equivalent to a net present value of approximately Rs 70,000 crore," the statement said.
The net debt of the company stood at Rs 1,09,200 crore on June 30, 2018.
Meanwhile, the Sensex was trading 87.21 points lower at 38,604 level. The Nifty, too, was trading 20.75 points lower at 11,656 level.