Vodafone could reportedly call for pitches from banks to advise it on the IPO of its Indian unit in Q1 2016, after it has had time to assess the impact of new cellco Reliance Jio on the market. The listing could raise about US$2bn for the UK operator.
Vodafone (LON:VOD) could reportedly call for pitches from banks to advise it on the IPO of its Indian unit in Q1 2016, after it has had time to assess the impact of new cellco Reliance Jio on the market.
The UK-based mobile giant confirmed earlier this month that it is preparing for a potential listing of Vodafone India, the country’s second largest mobile operator with around 184 million subscribers as of 31 March, but said it has yet to take a final decision on whether or not to proceed. Vodafone had hired Rothschild to look into the benefits of an IPO.
Billionaire Mukesh Ambani’s Reliance Jio is set to launch commercial operations around December. In preparation, the nascent player has spent billions of dollars on spectrum, signed multiple infrastructure sharing agreements with rivals, and built out an extensive fibre network, aiming to achieve 100% network coverage within the next three years.
Vodafone also wants to wait until the results of a spectrum auction set to take place in India early next year are in, Bloomberg cited people with knowledge of the matter as saying.
The British group could list up to 10% of Vodafone India’s shares, valuing it at about US$20bn, the report said.
Over the summer, Vodafone spent months discussing possible European asset combinations with Liberty Global, leading industry observers to question whether the UK mobile giant would hold onto its Indian and African businesses in the event of a full merger.
Vodafone has been considering an IPO of its Indian unit for several years, but the assumption has been that it would wait until its local tax cases are settled. The operator is one of multiple foreign companies to have faced accusations of underpaying local taxes, however, there are signs that authorities are seeking to make it easier for international firms to do business in the country.
Earlier this month, the Bombay High Court ruled in favour of Vodafone in a £450m (US$690m) tax case covering the treatment of a call centre and share options following its US$10.9bn takeover of Hutchison Essar in 2007.
However, a separate US$2.6bn tax dispute with the Indian government remains under international arbitration.
Mumbai-based Vodafone India posted service revenues of £1.13bn (US$) for Q2 2015, up from £1.02bn for Q2 2014.
