Vodafone wants PE partner for its India business

The UK-based telecom carrier took Essar's 33% in the business for $5.46 billion earlier this month. In doing so it exceeded the foreign ownership limit for India's telecom sector by 1%, which means it must divest a portion of its holding to a domestic entity.

Separately, Vodafone is looking for a foreign partner to take a stake in its India operation, which is the country's third-largest mobile service provider by subscribers. The company is thought to have invested around $18 billion in its India assets but analysts say that the business is only worth $12-14 billion, given the current state of the market.

Vodafone bought a 67% stake in what was then Hutchison Essar in 2007. It has since struggled due to rising competition and falling call rates.

It was reported last year that BT, another UK telecom carrier, was in talks with prospective buyers of its 29.9% stake in Tech Mahindra, one of India's leading telecom and IT outsourcing services providers. Goldman Sachs, Providence Equity Partners and Apax Partners were touted as potential acquirors.

BT subsequently sold 5.5% of its holding to Mahindra & Mahindra, the Indian automotive group that founded Tech Mahindra as a joint venture with the UK company.

 

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• Topics
• South Asia
• Media
• Goldman Sachs
• Providence Equity Partners
• Apax Partners Hong Kong