Vodafone to buy Indian unit for $1.65 billion

Vodafone Group Plc has sought approval from the authorities to raise its stake in the India unit for 101.41 billion rupees ($1.65 billion) it said on Tuesday, after India allowed foreign companies to take full ownership of local carriers.

Vodafone, which entered India in 2007 by buying Hutchison Whampoa’s local cellular assets in an $11 billion deal, directly and indirectly owns a combined 84.5 percent of Vodafone India, the country’s No.2 telecoms company by users.

Vodafone directly owns 64.38 percent of the India unit.

In August, India relaxed rules on foreign holdings in the sector to allow companies such as Vodafone to own 100 percent of their Indian businesses.

Before the rule change, foreign companies were limited to direct stakes of no more than 74 percent in Indian carriers.

India’s Piramal Enterprises owns about 11 percent of Vodafone India. The remainder is owned by investors including Indian businessman Analjit Singh, Vodafone India’s non-executive chairman.

Vodafone said on Tuesday after increasing its stake to 100 percent in the India unit, the British telecoms operator would consider providing additional capital by subscribing to shares of the subsidiary.

Vodafone has told the Indian government it plans to invest more than $2 billion in the country, Telecommunications Minister Kapil Sibal told Reuters this month.

($1 = 61.5050 Indian rupees)

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Vodafone to buy Indian unit for $1.65 billion