Vodafone buys out Piramal Enterprises stake for Rs 8,900 crore

Apr 10 2014, 19:06 IST
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Newbury, England-based Vodafone carried out the deal through its indirect subsidiary, Prime Metals Ltd, Piramal Enterprises said. Reuters Newbury, England-based Vodafone carried out the deal through its indirect subsidiary, Prime Metals Ltd, Piramal Enterprises said. Reuters
SummaryPiramal Enterprises said in a statement it will get Rs 1,960 per share.

Billionaire investor Ajay Piramal controlled Piramal Enterprises on Thursday said that it has agreed to divest its entire equity stake in Vodafone India.

Piramal Enterprises said that it will divest its entire equity stake, comprising 45,425,328 shares, in Vodafone India Limited to Prime Metals Ltd, an indirect subsidiary of Vodafone Group Plc, for a total consideration of Rs. 8,900 Cr, valuing the shares of Vodafone India Ltd. at Rs. 1,960 per share.

Piramal Group had acquired these shares at an average price of Rs. 1,290 per share for a total consideration of Rs. 5,864 Cr in two tranches during FY12, thus making a 50% return in just two years.

"The equity purchase in Vodafone was consistent with our objective of making investments that offer opportunity to generate attractive long term return on equity", said Ajay Piramal, Chairman, Piramal Group.

"I am glad to say that we have delivered against our targeted returns with this investment,Ē he added.

The shares of Piramal Enterprises closed up 3.73% at Rs 556.15 on Thursday on the Bombay Stock Exchange.

Piramal Enterprises to sell equity stake in Vodafone India

New Delhi: British telecom giant Vodafone Group plc will buy out Piramal Enterprises Ltd's 11 per cent stake in its India unit for Rs 8,900 crore to gain full control of the company.

Piramal Enterprises said in a statement it will get Rs 1,960 per share, over 50 per cent more than the Rs 1,290 a share it paid in 2011-12 to buy the stake in Vodafone India in two tranches for a total consideration of Rs 5,864 crore.

After the government allowed foreign companies to own up to 100 per cent of Indian telecommunication carriers, Vodafone had announced plans in October 2013 to take full control of the India unit by buying out minority partners for a total of Rs 10,141 crore.

The British group, which entered India in 2007 by buying Hutchison Whampoa's local unit in a USD 11 billion deal, had previously purchased a 4.5 per cent stake held by Vodafone India non-executive chairman Analjit Singh.

It had directly or indirectly held 84.5 per cent of Vodafone India, the nation's second-largest telecom company.

Newbury, England-based Vodafone carried out the deal through its indirect subsidiary, Prime Metals Ltd, Piramal Enterprises said.

After the Piramal Enterprises deal, Vodafone will be the first foreign telecom company to take full control of an Indian operator.

Piramal Enterprises shares rose 3.73 per cent to Rs 556.15 at the close on the BSE, the highest level since January 22.

"The equity purchase in Vodafone was consistent with our objective of making investments that offer opportunity to generate attractive long-term return on equity," Piramal Group Chairman Ajay Piramal said.

"I am glad to say that we have delivered against our targeted returns with this investment," he added.

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