CNBC Money Control | April 1, 2011
With Essar out of the way, Vodafone Plc is looking to list its Indian entity in the near future.
The timing and the equity stake to be listed will be decided once the British company buys out Essar’s stake by November.
When contacted, a Vodafone spokesperson in UK confirmed the listing plans. �We will go for an initial public offering (IPO) in the future. Once the put option is completed, Vodafone’s direct equity stake in Vodafone Essar Ltd will increase from 42% to about 75%. This means we will have more control over the management of the company,� the spokesperson said.
According to company sources, Vodafone is likely to give up 10% stake to the public through the IPO.
But before it can go for an IPO, Vodafone has to find an Indian partner to park just over 1% stake, to comply with the Foreign Direct Investment rules which allows a foreign company to have a maximum of 74% stake.
According to analysts the IPO may not be anytime soon.
�I don’t think the IPO is coming in the near future because the company would like to wait for the market conditions to improve,� said Mr Kunal Bajaj, Managing Director, Analysis Mason India. �The other issue that could come in the way is the FDI holding structure in Vodafone Essar because the two existing Indian partners � Analjit Singh and IDFC Group � are supposed to be acting in concert with Vodafone Plc for board level decisions. One will have to see if this flouts the FDI norms in any way.�
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