Vodafone India targets $4 billion IPO

Telecom operator Vodafone India is planning an initial public offering (IPO) to mobilize nearly $4 billion during the next fiscal, CNBC-TV18 reported.

The report said the company has appointed NM Rothschild as its consultant to work on the IPO roadmap. The paperwork for the initial public offering will be completed by the end of current financial year. Vodafone recently claimed that it is the second largest MNC in India based on annual revenues.

NM Rothschild will submit a report by August 2015 to assist Vodafone Plc of the UK to arrive at a valuation for the Indian subsidiary.

Interestingly, the enterprise value of Vodafone India is higher than Bharti Airtel’s market capitalization. The report said Vodafone India’s enterprise value is around $30 billion including the company’s $11 billion debt. In comparison, rival Bharti Airtel’s market capitalization now is nearly $25.6 billion.

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Vodafone Group, which exited from the U.S. telecom market by selling equity in Verizon Wireless, acquired 100 per cent stake in the Indian venture by buying out entire stake from its local partners for Rs 10,141 crore in 2013.

The main challenge for Vodafone is its Rs 20,000 crore tax dispute with the India government.

Vodafone invested more than GBP 12.8 billion in India since 2007 and in 2013 it made commitment to invest about Rs 4,000-6,000 crore annually.

Service revenue of Vodafone increased 12.6 percent to Rs 42,352 crore in fiscal 2015 – fuelled by 140 percent increase in 3G revenues. Vodafone has increased its investment (Capex) by 37.4 percent to Rs 8,598 crore. Vodafone India has 183.8 million subscribers — 171.5 (156 million) million pre-paid customers and 12.3 million (10.6 million) post-paid mobile users in fiscal 2015.

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