Tata, Birla, increase their stake in Idea

New Delhi: Two Indian business groups have raised their holdings in Idea Cellular Ltd by buying out the one-third stake held by U.S.-based carrier Cingular for $300 million, a company statement said.

The A V Birla group, which holds a third of Idea's stake, informed the Bombay Stock Exchange that Cingular had sold all of its 32.91 percent equity in Idea at 17.50 rupees per share.

"New Cingular Wireless Services Inc. has offered to sell its holding in Idea to the remaining founder shareholders, A V Birla Group and Tata Industries Ltd, at an aggregate price of US $300 million ," the AV Birla group informed BSE .

All the three companies held equal share in Idea and a remaining 1.3 percent is held by global insurer AIG.

Idea, India's fifth largest mobile firm, offers mobile services in eight of the 23 circles or zones making up the domestic telecoms market, where each zone is roughly equal to a state or a large city.

Pune-based Idea competes with larger rivals such as Bharti Tele-Ventures Ltd, 30.84 percent owned by Singapore Telecommunications Ltd, state-run Bharat Sanchar Nigam Ltd and the powerful Reliance business group.

A Tata source confirmed the deal, saying it was subject to government clearance.

Earlier, Cingular's stake was purchased by a joint venture firm of Telekom Malaysia Bhd and Singapore Technologies Pte Ltd, but the deal fell through because the Indian regulators said it could infringe domestic rules.