PE firm Providence sells 3.5% stake in Idea for Rs 1,383 crore

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MUMBAI: Providence Equity Partners have sold nearly 3.5% in Idea Cellular via a block deal on NSE for Rs 1,383 crore ($209 million), reducing the Rhode Island-based private equity firm to a small shareholder in India’s third biggest mobile service provider.
Another large block of Idea Cellular shares was also sold on the BSE on Friday morning but the seller’s name could not be confirmed. On the NSE, Morgan Stanley Asia (Singapore), a foreign fund managed by Morgan Stanley, bought more than half the chunk offered by Providence for Rs 736 crore, exchange data showed.
The latest stake-sale leaves Providence with a 3.33% stake in the Aditya Birla Group telecom flagship where at one point it had a 15% stake. In October 2006, the American private equity investor had paid Rs 1,800 crore for a 15% interest in Idea Cellular. The firm, however, in the last few years, have been gradually selling some of the telecoms company’s shares in the market in phases. Providence has made significant gains from the fresh stake-sale in Idea Cellular whose shares ended at Rs 106.55 on Friday. Its remaining stake of 3.33% is worth Rs 1,279 crore.
Besides Idea Cellular, Providence holds a significant stake in Aditya Birla Telecom Limited, an unlisted company which runs Idea’s Bihar operations and holds a 16% stake in Indus Towers, the country largest cellular tower operator.
Founded in 1989 by Brown University grad Jonathan Nelson, Providence currently manages $45 billion in assets and mainly invests in media, wireless communication, education and information sectors. In India, the Biswajit Subramanian-led Providence holds stakes in Star CJ Network, UFO Moviez, Hathway Cable and Datacom. Providence has invested more than $1 billion in the country, making it one of the top private equity investors here.
Subramanian couldn’t be reached for comments for this story while a spokesperson of Aditya Birla Group offered no comments.