The much-talked Vodafone-Idea merger is in its final stage and after general meeting held on Tuesday, the shareholders of Idea Cellular sanctioned ‘Vodafone Idea Limited’ as the name of the merged company which estimates to raise Rs 15,000 crore fund from the public.
Withstanding the Jio effects, two of the top three telecommunication companies – Vodafone India and Idea Cellular decided to merge and form a single company that can serve millions of customers and survive in the tough competition as well. In the newly formed combined business entity, Vodafone is expected to own 45.1 per cent, 26 per cent by Aditya Birla Group and Idea shareholders will own 28.9 per cent share. Combining the customer base of both, Idea Cellular as well as Vodafone India, the newly merged company is expected to have around 430 million mobile subscribers right from day one – making it one of the largest telecommunication company in India.
Furthermore, the approval for Vodafone-Idea merger by the Department of Telecom (DoT) is already in the final stages and hence the companies held a general meeting on Tuesday to discuss the new name for the merged company. Perhaps, the meeting was marked with the absence of Idea’s Chairman of the board Kumar Mangalam Birla, who happens to be the proposed non-executive Chairman of merged entity; and meeting was chaired by Idea’s MD and CEO Himanshu Kapania. During the meeting, the shareholders of Idea Cellular proposed a new name for the merged entity – ‘Vodafone Idea Limited’, where Vodafone India holds majority of shares.
As per the agenda placed, the change in name will come into effect after Vodafone India gets merged with Idea Cellular Limited. Apart from the change in name of the company, the decision to raise a fund of Rs 15,000 crore through NCDs on private placement basis within a year was also approved at the EGM. From the huge clientele side, it is quite obvious that after getting a new name and acquiring more funds, the customers of both these telecom giants will have high expectations to get better quality services or maybe even cheaper services.