Corporate Ownership Structure and Acquisitions in the Indian Telecom Sector - The Idea Cellular Case

Posted: 17 Sep 2009

See all articles by Padma Srinivasan

Padma Srinivasan

Manipal University, Bangalore Campus

Date Written: September 2, 2009

Abstract

India is the fastest growing economy post its liberalization and globalization activism and Asia’s third largest economy behind Japan and China. India’s telecom density is not so high as compared to the western market. Many companies are easily attracted to the telecom sector and are interested in investing large amount which is good for both the telecom sector as well as the economy of the country. India’s telecom market is the fastest growing investment pocket in the world. By 2010, it is expected that the investment will be around $24 billion and that the total number of subscribers to be around 500 to 600 million. Bharat Sanchar Nigam Ltd, Reliance Communication, Tata Teleservices, IDEA Cellular, Vodafone Essar and Bharati Airtel are interested in investing further in the sector between $12 million to $15 million in 2009-10.

This research paper is about the issues crept up in the acquisition and management of IDEA Cellular by Tatas and Birlas and the analysis of shareholders agreements, arbitration clauses and corporate governance questions on the right of refusal by the acquirers. The issues on the conflicting interests of acquirers and withholding information are also discussed.

Keywords: Corporate Governance, IDEA Cellular, Tatas and Birlas, Conflict of Interest, arbitration, shareholders pacts

JEL Classification: M21, G3, G34, G38

Suggested Citation

Srinivasan, Padma, Corporate Ownership Structure and Acquisitions in the Indian Telecom Sector - The Idea Cellular Case (September 2, 2009). Available at SSRN: https://ssrn.com/abstract=1466785

Padma Srinivasan (Contact Author)

Manipal University, Bangalore Campus ( email )

Bangalore, Karnataka
India

HOME PAGE: http://www.manipal.edu

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