Vodafone considers initial IPO for Indian business

Vodafone Group is weighing an initial public offering for its Indian business, the wireless carrier’s biggest unit by customers, said a person familiar with the matter.

Investment bank Rothschild is compiling a report about the benefits of a possible IPO, set to be delivered around August, according to the person, who asked not to be identified because the plan isn’t public.

Vodafone will decide whether to proceed after that, and an IPO will also depend on market conditions, the person said.

An IPO would provide Vodafone with cash while allowing investors to bet specifically on India, where wireless growth is outpacing that of more mature countries such as Vodafone’s home market, the UK Shares of Vodafone hit their highest level in more than 14 years last week after comments by Liberty Global’s John Malone fuelled expectations that the wireless carrier would take part in the industry’s consolidation.

Representatives for Vodafone and Rothschild declined to comment. CNBC-TV18 earlier reported Newbury, England-based Vodafone’s plan toward an IPO for the India unit.

The Indian division’s earnings before interest, taxes, depreciation and amortisation reached £1.28bn (€1.6bn) in the latest fiscal year on sales of £4.3 bn. The unit, which has more than 180m customers, accounts for 10% of Vodafone’s total revenue.

Vodafone shares have advanced 14% this year, giving the company a market value of £67.3bn.

Vodafone, India’s second-largest wireless operator, was among carriers spending $18bn in the country’s airwaves auction this year.

Last year, Marten Pieters, head of Vodafone India at the time, said in an interview that the company won’t consider an IPO of the unit until it has greater certainty about its access to airwaves.

Early this year, Indian authorities said they won’t appeal a court ruling that sided with Vodafone in a tax dispute as the country works to reassure foreign investors about governance rules.

The dispute involved the way Vodafone reported a transfer of shares between its business in India and another unit.



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