KUALA LUMPUR: Axiata is looking to sell its 20% stake in Idea Cellular as the Malaysian company believes the Indian telecom provider’s valuation will remain subdued for at least the next three years given the likelihood of a pricing onslaught stemming from the entry of Reliance Jio Infocomm, said three people familiar with the plan.
Formerly Telekom Malaysia, Axiata had originally asked Idea’s parent, the Aditya Birla Group, to buy back the holding but was turned down. The Malaysian company is said to have informally asked investment bankers to seek buyers for the stake. Axiata has passed a board resolution to sell its stake in Idea, said one person, although that couldn’t be independently verified by ET.
“They (Axiata) have the right to sell to any investor and barring a few strategic companies, are welcome to sell to anyone,” said one of the people cited above.
However, buyers for a minority stake in an Indian telecom company may be hard to come by, said an investment banker, adding there may be more interest in a majority stake.
The estimated share value of Idea Cellular on Axiata’s books has been pegged at Rs 155 apiece. That compares with Idea Cellular’s closing price of Rs 79 on Tuesday, down from a record Rs 145 last year.
