Vodafone inches towards Indian IPO

Vodafone CEO Vittorio Colao indicated that the positive resolution to its $2.2 billion dispute with the Indian tax authorities has helped open the door for an initial public offering for its India subsidiary.

Speaking at the World Economic Forum meeting in Davos, Colao told Reuters: "Everything that goes in the direction of stability of law and certainty of law is (positive) as we are an investment led sector...and therefore we need to have long-term visibility and stability of conditions to tell our shareholders and prospective shareholders what we are going to do."

Commenting on the possibility of an IPO, Robin Bienenstock, an analyst at London-based Bernstein Research, recently said that Vodafone was expected to list 30 per cent of the Indian business later this year, which could raise £3.4 billion.

Colao noted that the tax case had clearly been a barrier to an IPO, but also pointed towards the new telecoms policy (NTP) as being another potential hurdle. "Stability for the future, ability to forecast what is happening, stability of the regulatory framework is extremely important," said the CEO, adding: "Friendliness is very important."

Vodafone--together with Bharti Airtel and Idea Cellular--is believed to be looking toward the forthcoming NTP to trigger a much needed wave of consolidation in the Indian mobile market, which has suffered from being heavily overcrowded leading to poor margins and falling APRUs for the larger service providers, according to a report in The Financial Express.

For more:
- see this Reuters article
- see the The Financial Express article

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