Vodafone mulls Indian IPO, but only if local issues get resolved

Vodafone CEO Vittorio Colao indicated that the company might consider an initial public offering for is majority-owned Indian venture, Vodafone Essar, starting from next year. However, Colao warned that any such move will only be considered once there has been a satisfactory resolution to its disputes with its existing partner Essar, and the Indian tax authorities.

Speaking to Bloomberg in India, Colao said that, once these issues were resolved, "we should consider at some point whether a listing of the company is an option," adding, "If there's a good story from a data perspective, and from a regulatory perspective, I'd be likely to look at it."

Commenting on this potential IPO, Apurva Shah, head of research at the Mumbai-based financial services firm Prabhudas Lilladher, noted that Vodafone was a very respected company, and markets would take a listing positively, "In India, the outlook on the mobile companies is turning somewhat positive," he told Bloomberg. "Institutional interest is certainly there for mobile companies at this point."

A further clue to Vodafone's possible intentions came from a Dow Jones Newswires report of an Indian TV interview given by Colao. The exec said that the company had been approached by the Indian government regarding an out-of-court settlement over its long-running battle over tax. However, Colao declined to offer further details as to any offer, only commenting that India's policy of taxing the buyer was wrong.

Evidence that Vodafone is prepared to take the IPO route comes from the listing of its South African Vodacom unit in 2009. Colao told Bloomberg that there was a possibility that its Indian operation could mimic what has been done in South Africa.

Vodacom "maintains its independence, but we have local individual shareholders, and all the benefits of belonging to the Vodafone Group," Colao said. "South Africa is one of the countries where data is growing the most. So, there are some similarities here."

For more:
- see this Bloomberg article
- see this WSJ article (sub. req.)
- see this Dow Jones Newswires article

Related Articles:
Vodafone plans IPO following $5bn deal with Essar on Indian JV
Rumour mill: Vodafone schemes buy-out of Indian partner
Vodafone Essar accused of price fixing in India
What now for Vodafone's potential cash mountain?

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