Is British telecom giant Vodafone Plc reviving its plan to list its India subsidiary in a blockbuster public float?
While the company has officially maintained that no decision has yet been taken on the long-planned initial public offer (IPO), investment banking sources have indicated that Vodafone is examining the proposal for a $3-4 billion float by fourth quarter (January to March) of 2015-16.
At about Rs 25,000 crore, this could well turn out to be the largest ever IPO in India’s capital market history, surpassing state-owned behemoth Coal India Limited’s (CIL’s) Rs 16,000 crore float in 2010.
Responding to a query from HT, Vodafone Group Plc did not offer any comments about the developments. “No comments,” said Ben Padovan Group Head of Media External Affairs Vodafone Group Services Ltd over phone from the UK.
Padovan also did not comment on the speculation that the telecom giant has engaged investment banking major NM Rothschild to carry out pre-IPO due diligence ahead of a formal launch of the listing process.
Vodafone’s decision to invest in India despite a protracted tax dispute is likely to come as a major vote of confidence for the government, amid a brewing uncertainty over demands on foreign portfolio investors (FPIs) to pay minimum alternate tax (MAT) dues over past years.
Vodafone India operates as a 100% subsidiary of its British parent after the company last year bought out the minority stake held by Indian partners.
In 2013, India lifted the foreign direct investment (FDI) cap allowing overseas investors in the telecom sector to 100% from 74% earlier.
Vodafone entered India in May 2007, when it bought 67% of Hutchison Essar for $11.1 billion (about Rs 43,000 crore then) from Hong Kong-based Hutchison Whampoa’s Indian arm.
It is fighting a tax dispute of Rs 20,000 crore for this transaction after the government changed laws in 2012 to imposed tax on a retrospective basis on older corporate deals such as Vodafone’s acquisition of Hutchison’s mobile assets in India.
Industry sources said Vodafone could be valued at $30 billion (about Rs 1,90,000) crore.
At Rs 1.9 lakh crore, Vodafone India would be ranked the fifth most valuable company in the Indian market in terms of market capitalisation, behind Mukesh Ambani-led Reliance Industries Ltd (Rs 2.89 lakh crore), ONGC (Rs 2.81 lakh crore), Sun Pharma (Rs 2.41 lakh crore) and government-owned Coal India Ltd (Rs 2.33 lakh crore).
It could also be ahead of sector leader Bharti Airtel, which currently has a market capitalisation of about Rs 1.6 lakh crore.