Idea to become Vodafone Idea, target of raising Rs 15,000 crore.
Mumbai, Idea is close to completion of the merger process in Vodafone. In the same episode, Idea Cellular’s board has called the Extraordinary General Meeting (EGM) on June 26, in which name of ‘Idea Cellular Limited’ will be changed to ‘Vodafone Idea Limited’. Apart from this, the board’s plan will also be considered in EGM, which aims to raise Rs 15,000 crore through non-convertible securities. It will be used to strengthen the payment of debt and balance sheets so that rivals such as Reliance Jio and Indian Airtel can compete.
The process of merger of Vodafone India and Idea Cellular is in the final stage. After the merger, it will become the country’s largest telecom company, with about 42 percent customer market share and 37 percent revenue share. After the merger the new company company will be known as Vodafone Idea Limited.
Brand Experts had earlier told our Associate newspaper Economic Times that the company’s new name after the merger is very good because Vodafone is strong in urban areas, Idea Cellular in rural areas. In this sense, the new name should be such that the customer can remember easily. Brand Consultant Harish Bijoor said that the new name contains the names of both companies and it is good for both parties. He said that the new identity also contains old identity, nothing is lost.
Idea Cellular is working on a plan to raise Rs 15,000 crore via non-convertible securities. The company has been raising funds for the past few months and according to analysts, the new company, which will be formed after the merger, has to continue putting more funds. At the end of March, the combined debt on both the companies was more than Rs.1,14,000.
Idea has already raised Rs 6,750 crore through private placement of its promoters and shares this year, while Vodafone is putting Rs 7,390 crore. Apart from this, both companies have sold their towers to the American Tower Corporation for Rs 7,850 crore. The names of senior executives of the new company which came into existence after the merger have already been announced two months ago. Balesh Sharma will play the role of Chief Executive Officer of the new company. Analysts believe that Sharma and his team face a big challenge as both companies are lagging behind in the expansion of 4G and VOLTE services from Reliance Jio and current market leader Airtel.
