Idea jumps on merger talks

Idea continues to rule the roost today morning too. Yesterday, it breached the UC thrice – at Rs.85.55, then at 89.45 and later at 93.35. Today, the stock rose over 14% to Rs.111.70 and currently remains 12% up at Rs.110 levels. Volumes are robust on the counter.

Idea confirmed yesterday that it was indeed in ‘preliminary talks’ with Vodafone for a merger and it was negotiating for equal rights for both. If this does happen after these initial talks, it will go on to create India’s largest telecom company, making it easier to take on rivals like Airtel and Reliance Jio. Vodafone has also confirmed that it is looking at an all-share merger of Vodafone India (excluding Vodafone’s 42% stake in Indus Towers) and Idea.

A CLSA report has said that if Vodafone and Idea decide to merge, the combined entity would have 43% revenue market share v/s 33% of Bharti Airtel currently and 13% of Reliance Jio by 2018-19.

The Aditya Birla group owns 42.2% of Idea while Malaysian carrier Axiata Group Bhd has a 19.8% stake.