Mumbai, April 10: The Tatas and the Birlas have finally buried the hatchet after a bruising battle over Idea Cellular that has raged for over two months.

On Monday, the Aditya Birla group announced that it would fork out Rs 4,406 crore to buy out the Tatas’ 48.14 per cent stake in Idea Cellular. The buyout valued Idea, which is the country’s fifth largest cellular operator, at Rs 9,153 crore.

The stake buyout will raise the holding of Kumar Mangalam Birla in Idea Cellular to 98.3 per cent. Of the 48.14 per cent that he has acquired from the Tatas, close to 15 per cent will be acquired by Aditya Birla Nuvo Ltd and its subsidiaries and the rest by Birla TMT Holdings Pvt Ltd, a holding company in the group.

Announcing that it has accepted the offer made by the Tatas, the Aditya Birla group said Birla TMT Holdings would place “on the same terms”, the equity acquired by it, to other financial investors.

Though it did not reveal the identity of the financial investors or when the equity would be sold, the combined holdings of various Aditya Birla group companies after such a sale will come down to 65 per cent.

The acquisition of the Tata stake comes after an acrimonious battle between the two leading industrial houses.

Their differences came to the open in February when the Aditya Birla group asked the government to issue a direction to the Tatas to exit or reduce their stake in Idea to below 10 per cent citing the breach of licence terms and conditions as Tatas held stake both in Tata Teleservices and Idea.

The Tatas responded by issuing a notice to the Birlas that accused them of breaching the shareholders’ agreement between them by revealing confidential information about Idea Cellular at an analysts’ presentation held by one of its group companies.

However, a vital sign that the battle between the two houses was coming to an end emerged last week when Ratan Tata said the group would dilute its stake in Idea at an appropriate time and value.

His statement came at a time when Maxis Communications Berhad, the Malaysian telecom major, had expressed interest in acquiring the 48.14 per cent held by Tatas.

It was then that the Aditya Birla group, who had the first right of refusal in case the other partner wanted to exit the venture, accepted the offer made by the Tatas.

With the deal now done, it is now expected that Idea will speed up plans to come out with an initial public offering. The company is slated to make an entry into the Mumbai circle, a foray that was stalled earlier due to the dispute between the two partners.

“The battle between the two stakeholders had hurt the company’s growth and its IPO plans. With all the issues now settled in an amicable manner, we can now look forward to the company’s IPO,” said an observer. The Idea IPO will hit the market by September.

Sources do not rule out the possibility of Birla TMT Holdings divesting its stake to financial investors ahead of the IPO.