NCLT clears merger of Vodafone India and Idea Cellular
GUWAHATI: The National Company Law Tribunal (NCLT) has cleared the mega-merger of Vodafone India and Idea Cellular, paving the way for the creation of India's largest telecom operator worth over USD 23 billion with a 35 per cent market share.
As such, Vodafone Idea Ltd, the telecom juggernaut will dislodge the current market leader Bharti Airtel from the pole position, by its sheer size and scale.
Accordingly, the merged entity of Vodafone and Idea Cellular will have nearly 443 million customers surpassing Bharti Airtel's 344 million users.
A source privy to the development said that the NCLT clearance is through, and a joint statement from both Vodafone India and Idea Cellular is expected to be issued in the next few hours.
Notably, on July 26, the government had approved the merger of Vodafone India and Idea Cellular after the two firms provided for Rs 7,248.78 crore as one-time spectrum charge (OTSC).
So far, it is revealed that Kumar Mangalam Birla will be the non-executive Chairman while Balesh Sharma the new CEO of the merged entity, which would remain listed accordingly.
Following the development, last month, Telecom Secretary Aruna Sundararajan had said that government expects the market to be stabilised post-merger. He further added that government expect to see robust growth in the telecom sector with the emergence of three strong private sector players, and one public sector player.
Notably, the mega-deal was announced by Vodafone India and Idea Cellular in March 2017 to take on competition from richest Indian Mukesh Ambani's Reliance Jio, which has shaken up the telecom market with free voice calls and dirt cheap data offering.
The merger which has been in the making for well over a year is expected to face the challenges of stiff competition from Bharti Airtel and Jio. It has a debt of Rs 1.09 lakh crore but has the option to monetise an 11.15% stake in Indus Towers which would equate to a cash consideration of Rs. 5100 crore. The new company will also start with a cash balance of INR 19,300 crore.