Vodafone has allegedly initiated talks with at least two private equity companies to sell a stake in its India operations.
Prior to this, Vodafone and Essar exercised the right to transfer Essar’s 33 per cent stake in Vodafone Essar to Vodafone for $5.46 billion.
Thereafter, Vodafone will exceed the existing limit on foreign holding in a telecom company by 1 per cent. Thus, it may divest this amount to a domestic partner.
It is believed that Vodafone’s search for a foreign partner may lead to an increase in the stakes of Analjit Singh, Ashim Ghosh and IDFC, along with a transfer of shares held directly by Vodafone overseas. The amount of stake that will be divested to a new equity partner will depend on the valuation the buyer offers after evaluation.
Further, it is believed that the company may offload 1 per cent to the investors in India and then offload a larger stake to a financial investor from abroad. Vodafone’s estimated investment in the India arm is already around $18 billion.
