The stock was trading lower by 6.67 per cent at Rs 100.70 apiece on BSE at 1045 hrs. In early trade, it fell to a low of Rs 92 per share, down by over 14 per cent compared to previous close.
On the National Stock Exchange, the stock was trading down by 6.24 per cent at Rs 101.35 at 1045 hrs after touching a low of Rs 92.35.
Over 12 crore shares of Idea were traded on NSE in morning session.
Shares of Idea Cellular were trading higher by 2 per cent at Rs 111.80 on BSE after the announcement of the merger deal. However, the stock plunged to a low of Rs 92 following unconfirmed reports the deal may value the stock at much lower than the current market price.
Idea informed the bourses that its board today approved the "scheme of amalgamation of Vodafone India Limited (VIL) and its wholly owned subsidiary Vodafone Mobile Services Limited (VMSL) with the company".
"The implied enterprise value is Rs 828 billion (USD 12.4 billion) for Vodafone India and Rs 722 billion (USD 10.8 billion) for Idea," a joint statement by the companies said.
After completion of the merger, Vodafone will own 45.1 per cent of the combined company, Idea will have 26 per cent stake while the rest will be owned by public shareholders.