Update at 1.25 pm IST: Idea Cellular shared recover midly to trade at Rs 99.95, down 7.37 percent. Turnover spurts, with 230 lakh shares changing hands in just four hours, as against the daily average of 23.5 lakh shares.
Update at 10.40 am IST: Idea Cellular shares fell 9.22 percent to Rs 97.95 after gaining about 4 percent on announcing approval of merger with British telecom firm Vodafone's India operations.
Highlights of the merger, according to the joint press statement:
Implied enterprise value for Vodafone India is $12.4 billion and for Idea Cellular, $10.8 billion.
Transaction expected to close by calendar year 2018, subject to necessary approvals.
By the end of the fourth year, the annual cost savings will be about $2.1 billion.
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The new entity will have 400 million subscribers, translating into 35 percent customer market share and 41 percent revenue market share.
In what could be the biggest shake-up in the Indian telecom space, Aditya Birla Group company Idea Cellular and the India unit of British telecom service provider Vodafone announced a merger on Monday.
The move pips Bharti Airtel as the largest Indian telecom operator in terms of subscription base and revenues. Shares of Idea Cellular were trading 3.75 percent higher at Rs 112 at around 9.50 am on the BSE.
In a regulatory filing to the BSE, Idea Cellular said Vodafone will hold 45.1 percent in the merged entity, leaving 26 percent for the Indian partner. The balance will be held by the public.
"The promoters of Idea Cellular will have the right to acquire up to 9.5 percent acquire additional stake from Vodafone under an agreed mechanism with a view to equalise the shareholdings overtime," the company informed the BSE.
"The Board of Directors believes that the proposed amalgamation will result in creation of India's largest telecom operator with widest mobile network in the country and pan-India 3G/4G footprint," the filing said.
As of December 31, 2016, Idea Cellular had 192 million subscribers while Bharti Airtel had 265.85 million and Vodafone India 204.7 million subscribers. Another operator, Aircel, had 91 million subscribers at the end of calendar year 2016.
Bharti Airtel was trading flat at Rs 348 and Reliance Jio-owner Reliance Industries was marginally down at Rs 1,297.
The BSE Sensex was trading 125 points lower at 29,523.