Idea cellular which had been constantly dumping stake to Private Equity and VCs, late last night completed its IPO in India. From the subscription figures obtained from Ventura Securities, their is a terrific demand for Indian Equities. The Idea IPO was of $500 Million and received bids for $25 Billion. Last April, Birla’s bought 48% Idea Cellular stake from Tata’s at $ 1 Billion.
All the brokerage houses were bullish on the prospects of IDEA cellular except, First Global’s Shankar Sharma, who felt it was expensive. A Broker with Ventura said,
After the Vodafone – Hutch deal, valuations of other Indian telcos are also likely to rise. However, Idea is likely to trade at a discount to Bharti Airtel.
The immediate challenge for Indian telcos is the falling ARPU / Month without any alternative source of revenue such as 3G services or Broadband. ARPU / Month which were at Rs 450 levels are likely to be between Rs350 – Rs400 for Bharti Airtel and Vodafone India; While for Reliance Communications it is likely to be in the range of Rs300 to Rs325 in the coming quarters.