Vodafone set for IPO as Analjit takes over as chairman
Vodafone India, the country's third-largest mobile telecom service provider, is likely to come out with an initial public offer (IPO) of shares, its new chairman Analjit Singh said on Friday after being roped into lead the company that grew from his stake sale Max Telecom to the former Hutch. HT reports.business Updated: Feb 10, 2012 22:13 IST
Vodafone India, the country's third-largest mobile telecom service provider, is likely to come out with an initial public offer (IPO) of shares, its new chairman Analjit Singh said on Friday after being roped into lead the company that grew from his stake sale Max Telecom to the former Hutch.
"There is an idea that we should take the company to the market for IPO," Singh, for whom the chairman's post has been created, told the Hindustan Times. "Earlier Essar did not allow us to go for IPO. Now we will consider it." Last week, the Essar group completely exited Vodafone India.
On Friday, the company named Singh as non-executive chairman. He still owns about three per cent equity in the company. His appointment will be effective from February 16.
His appointment as chairman marks a full circle for him as he had sold his equity and divested management control to Hutchison Whampoa about 13 years ago, in 1999. He kept 11 per cent equity in the company for another three-four years.
Vodafone Group bought Hutchison Whampoa's 67% stake in Hutchison Essar in 2007. Later, Vodafone bought out Essar group, its joint venture partner last year.
"Vodafone always had a strong management team in place. Now they are trying to ground the company in Indian settings. The idea is to give it a local flavour. So they asked me to become the chairman. I have long friendship with the company management so I accepted the offer," said Singh who plans to devote 15% of this total time to the company.
"My contribution will be to set up a solid board and establish a good arrangement in the company."
Last month, Vodafone won a major verdict from the Supreme Court. Indian tax authorities had asked the company to pay a tax of $2.5 billion tax on the 2007 deal. The favourable verdict gave a major relief to the company.
"Having overcome the tax hurdle, the UK parent now plans to raise its stake in the Indian unit closer to the 74% permissible limit under local rules," said Singh.
A major challenge that Singh will have to face will be to tackle the issue of CBI investigations on the company for alleged irregularities in the allocation of bandwidth between 2001 and 2003, when Pramod Mahajan was the communications and IT minister. CBI has already filed an first information report in the case.