British telecom major Vodafone said it has started the pre-work for initial public offer of its Indian business, the largest if customer numbers are to be believed. Vodafone Group CEO Vittorio Colao said, “I cannot give you a date but I can tell you we are positively inclined to an IPO and have started some preparatory work.” The company had asked investment bank Rothschild to compile a report about the benefits of a possible IPO, which would provide the company with cash for its plans for India. The company has been considering an Indian IPO for several years, but regulatory and tax issues in the country held them back. “We have not made a final decision because there are many factors that influence one way or the other but we are positive,” he said.
Not specifying any dates, Colao said, “It's very hard to give you date as many things can happen in financial markets. We have preparatory work underway so that we can make a decision.” The business, with more than 180 million customers, accounts for 10 per cent of Vodafone's total revenue. When asked if the company can go for an IPO during the pendancy of a £2 billion tax dispute, Colao said “yes”, without going into the details. The company said it has invested more than 12.8 billion pound in India since 2007, and in 2013, made a commitment to invest about £ 850 million annually.
Vodafone is India’s second-largest wireless mobile operator with a market capitalisation of about 9.3 billion pound, and an enterprise value of 11.4 billion pound, according to analysts at Citi. The Indian division’s earnings before interest, taxes, depreciation and amortisation reached 1.28 billion pound on sales of 4.3 billion pound in 2014-15.
