Aditya Birla Group chairman Kumar Mangalam Birla (left) with Aditya Birla Nuvo managing director Sanjeev Aga in Mumbai on Monday. (Fotocorp )

Mumbai, Feb. 5: Idea Cellular today said it was open to acquisitions to create value for its shareholders. The company is all set to enter the market with an initial public offering (IPO) on February 12 to raise Rs 2,125 crore.

“We are not averse to acquisition to create value for our shareholders. However, as of now, nothing is in sight,” Aditya Birla group chairman Kumar Mangalam Birla told reporters here.

He said the company was interested in acquiring companies in India, but declined interest in Hutchison Telecom's 67 per cent stake in Hutch Essar.

“We will go for acquisition in the domestic market and (are) not looking at business other than India,” Birla said.

The IPO has a price band of Rs 65-75 per share.

While the issue will open on February 12 and close for subscription on February 15, the IPO proceeds will be used to build, strengthen and expand network. It will also part-finance the capital expenditure required for national long distance (NLD) operations. Part of the amount garnered will be used for rollout of service in the Mumbai circle which is expected to happen during this calendar year.

Kumar Birla said the company was looking forward to a robust addition in its subscriber base which stood at 12.4 million in December 2006. Birla added that since the beginning of the last calendar year, the company has seen an improvement in its market share in nearly all the circles that it operates.

This came at a time when its competitors have adopted an aggressive approach. Starting from a modest two circles, Idea is now present in more than 13 circles. Further in eight of its major circles, the market share has increased.

It is a market leader in three circles and occupies the second slot in two crucial circles. With at least two new circles set to be added in its list and the company eyeing other territories too, it is expected that by the end of this year, its coverage in the country will rise to over 70 per cent.

The company recently concluded a pre-IPO placement of Rs 375 crore to some of its promoters, directors and certain high net worth individuals. This included a Rs 225 crore from Aditya Birla Nuvo Ltd and Rs 137.1 crore from Birla TMT Holdings Pvt Ltd — both existing promoters of the company. The pre-IPO placement was made at the top end of the price band.

Retail plans

The Aditya Birla Group will go solo in retail.

Birla told reporters here that it would not partner any overseas entity in its retail venture, which kicked off with the acquisition of Hyderabad-based supermarket chain Trinethra, including its online shopping outfit.

“We will not rope in any overseas partner for our retail foray — we will go alone,” Birla said. The group’s detailed plans for this foray is being fine-tuned and will be declared in another two months, he said.

Asked whether Aditya Birla Retail was scouting for land to set up its establishments, Birla said: “The time is not ripe yet to make a comment on that.”

Commenting on the potential of the still nascent retail market in India, Birla felt the market as “immature” but was bullish on its growth prospects.

The Indian retail market is estimated to be worth $300 billion, nearly the size of US retail giant’s Wal-Mart’s annual revenue of $320 billion.

Attracted by the immense potential inherent in this sector, several players including Mukesh Ambani-spearheaded Reliance Group and Sunil Mittal’s Bharti, have entered the segment.

While Wal-Mart has tied up with Bharti, French retailer Carrefour is talking to potential Indian partners for an entry.