Vodafone also said it has not decided whether to change the subsidiary's name after Essar's exit.
Vodafone Essar headed for IPO after €3.5b buyout
Vodafone has confirmed speculation it will pursue an IPO of Vodafone Essar after it acquires Essar Group's stake in the venture.
A Vodafone spokesperson told The Hindu Business Line that the company will conduct an IPO at a time - and amount floated - to be determined after the buyout is complete.
Vodafone last week revealed it will spend $5 billion (€3.5 billion) to acquire Essar's 33% stake in the venture. The deal, expected to close in November, will take Vodafone's stake in Vodafone Essar to 75%.
Sources within the company told Business Line that Vodafone is likely to float a 10% stake in the IPO. It will first find an Indian partner to park a 1% stake in Vodafone Essar, to comply with Indian rules preventing foreign ownership of more than 74% of a mobile operator.
But analysts expect Vodafone to hold off on an IPO until market conditions improve.
The operator could also face regulatory opposition to the deal with Essar on the grounds that the remaining Indian partners in the venture are supposed to side with Vodafone on board-level decisions, which may be considered a breach of the foreign ownership rules.
The partners have been tussling over the buy-out for months, with Essar accusing Vodafone of trying to squeeze it out at an artificially low price and Vodafone claiming Essar was trying to inflate the valuation of its stake.