Vodafone buys out Piramal stake for Rs 8,900 crore
British telecom giant Vodafone Group plc will buy out Piramal Enterprises Ltd's 11% stake in its India unit for Rs 8,900 crore to gain full control of the company.business Updated: Apr 10, 2014 19:16 IST
British telecom giant Vodafone Group plc will buy out Piramal Enterprises Ltd's 11% stake in its India unit for Rs 8,900 crore to gain full control of the company.
Piramal said in a statement it will get Rs 1,960 per share, over 50% more than the Rs 1,290 a share it paid in 2011-12 to buy the stake in Vodafone India in two tranches for a total consideration of Rs 5,864 crore.
After the government allowed foreign companies to own up to 100% of Indian telecommunication carriers, Vodafone had announced plans in October 2013 to take full control of the India unit by buying out minority partners for a total of Rs 10,141 crore.
The British group, which entered India in 2007 by buying Hutchison Whampoa's local unit in a $11 billion deal, had previously purchased a 4.5% stake held by Vodafone India non-executive chairman Analjit Singh.
It had directly or indirectly held 84.5% of Vodafone India, the nation's second-largest telecom company.
Newbury, England-based Vodafone carried out the deal through its indirect subsidiary, Prime Metals Ltd, Piramal said.
After the Piramal deal, Vodafone will be the first foreign telecom company to take full control of an Indian operator.
Piramal shares rose 3.73% to Rs 556.15 at the close on the BSE, the highest level since January 22.
"The equity purchase in Vodafone was consistent with our objective of making investments that offer opportunity to generate attractive long-term return on equity," Piramal Group chairman Ajay Piramal said.
"I am glad to say that we have delivered against our targeted returns with this investment," he added.