Chairman of Piramal Enterprises Ajay Piramal, is for sure one of the most successful investors of the country after it announced to divest its entire stake in Vodafone Group PlC’s Indian arm.
The British telecom giant has agreed to pay Rs 8,900 crore to Piramal Enterprises in exchange of 11 per cent stake in Vodafone India. The reaction of the news was seen on the stock prices of Piramal Enterprise limited which surged by 3.73 per cent to Rs 556.15 per share on the Bombay Stock Exchange.
As per the statement, Piramal Enterprises holds 45,425,328 shares or 11 per cent in Vodafone India which it had purchased at the price of Rs 1,290 per share in 2011-12 in two phases for a total consideration of Rs 5,864 crore. “Piramal Enterprises has agreed to divest its entire equity stake, comprising 45,425,328 shares or 11 per cent, in Vodafone India limited to Prime Metals limited, an indirect subsidiary of Vodafone Group Plc, for a total consideration of Rs 8,900 Cr,” ccompany said in the statement.
The company now would receive Rs 1,960 per share of Rs 8,900 crore, which is almost 50 per cent more than its initial investment.
After the Government allowed foreign companies to own up to 100 per cent of Indian telecommunication carriers, Vodafone Group PlC 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.
Commenting on the stake sale, Piramal Group Chairman Ajay Piramal said, “The equity purchase in Vodafone was consistent with our objective of making investments that offer opportunity to generate attractive long-term return on equity.” He further added, “I am glad to say that we have delivered against our targeted returns with this investment.”
The British group, which entered India in 2007 by buying Hutchison Whampoa’s local unit in a $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 said. After the Piramal deal, Vodafone will be the first foreign telecom company to take full control of an Indian operator.