Idea Cellular to raise Rs2,000 cr via private placement of NCDs

Idea Cellular said on Tuesday that it intends to raise up to Rs2,000 crore by issuing unsecured redeemable non-convertible debentures (NCDs) on a private-placement basis.

This would be the fourth round of fund raising by the country's third-largest telecom operator within a period of two months, coinciding with the tariff war unleashed by Reliance Jio in the telecom sector.

In a regulatory filing, Idea said the tenor of the securities is 5 years and will mature on January 27, 2022. The company is offering an interest rate of 8.04 per cent per annum on the bonds, which will be listed on the NSE.

On 12 January, the Aditya Birla Group firm had said that it proposes to raise Rs500 crore through unsecured redeemable NCDs on a private placement basis maturing on 17 January 2022. The firm is offering an interest of 7.77 per cent annually on the bonds and they will also be listed on the NSE. The tenor of the bonds is 5 years.

 Likewise, on 2 January, Idea announced its plans to raise Rs1,000 crore through unsecured redeemable NCDs with a tenor of 5 years on a private placement basis maturing on 4 January 2022. The firm is offering an interest of 7.77 per cent per annum and the securities will again be listed on the NSE.

 The company's fund raising plans come amidst an intensifying price war in the telecom market with Airtel, Vodafone and Idea locked in a bitter rivalry with the latest incumbent Reliance Jio Infocomm.

 Entering the fiercely contested Indian telecom market in Sepetember last year, Jio has offered its subscribers free unlimited voice calls and data prompting rivals to counter with unlimited voice calls and as much as 4 times more data for 3G and 4G users at dirt cheap rates.

Market analysts project that the price war is just the beginning of a long battle as Jio aims to achieve 100 million 4G subscribers using competitive pricing in a market where the voice and data rates are among the cheapest in the world.