Shares of Idea Cellular lost 3.6% in Mumbai trading, while the benchmark S&P BSE Sensex closed down 0.84%. Idea Cellular Infrastructure Services Ltd, a unit of Idea Cellular, had around 9,900 towers with a tenancy ratio of 1.80 as of 30 September 2017.
It merged its loss-making Indian mobile business with Idea, India's third-largest wireless operator, at the start of the year.
"In the long term, we have a positive view on Idea and the deal could be viewed as a positive move with the 40 billion rupee-transaction value aiding Idea in cutting down its balance sheet debt", said Gaurang Shah, Head Investment Strategist at Geojit Financial Services.
India's network operators are rushing to consolidate amidst a year-long price war sparked by the entry of new competitor Reliance Jio with a brand new 4G broadband network financed by the country's richest man Mukesh Ambani. It will have nearly 400 million customers with 35% customer and 41% revenue market share.
Under the merger, the implied enterprise value for Vodafone India would be Rs. 82,800-crore while for Idea, it would be Rs. 72,200-crore. Jio's pricing strategy has hurt rivals' profits as they try to match low tariffs and also pushed some carriers to consolidate operations. The merger is expected to be completed in 2018.
The standalone tower businesses of Vodafone and Idea comprise a combined portfolio of almost 20,000 towers. Kumarmangalam Birla will be the Chairman of merged Vodafone-Idea entity and both the companies will have equal stakes in the merged entity over a period of time.
Indus-the biggest tower company-is a three-way joint venture among Idea, Vodafone and Bharti Airtel, which also controls Bharti Infratel.
The sale of ATC Telecom is expected to be completed in the first half of 2018, subject to regulatory approval.