Shares of Idea Cellular went up by 4.49% to Rs 57 a piece in early morning trading hours on Tuesday, on the back of the telecom department giving conditional nod to its merger with Vodafone India.
The Department of Telecommunications (DoT) on Monday approved the largest M&A deal in the sector, which will displace Bharti Airtel from the No. 1 spot after over 16 years.
The conditions for approval – given over a year after the deal was announced in March 2017 – include an upfront payment of Rs 7,268 crore. The demand is split between a bank guarantee of Rs 3,342 crore to cover what Idea owes on account of one-time spectrum charges and cash of Rs 3,926 crore by Vodafone towards the market price for non-auctioned airwaves, people familiar with the matter said.
Idea is widely expected to challenge the demand, since a similar claim on Bharti Airtel while acquiring Telenor India was stayed by the Supreme Court. Idea and Vodafone didn’t comment on the matter until press time. Legal moves and counters by DoT may further delay the merger, which was expected to be completed by June-end.