Piramal sells 11% stake in Vodafone India to its British parent
Piramal Enterprises Ltd's sale of 11 per cent stake in Vodafone India to its British parent Vodafone Group plc is consistent with the company's objective of making investments that generate attractive long-term returns, Ajay Piramal said.
U.K.-based telecom services provider Group plc has agreed to buy Piramal's 11 per cent stake in its India subsidiary for Rs 8,900 crore. Following the transaction, the British telecom giant will gain full control of the Indian unit.
Speaking about the deal, 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. I am glad to say that we have delivered against our targeted returns with this investment."
The value of the deal represents a profit of around 52 per cent for Piramal in just two years.
Previously, the British firm had bought a 4.5 per cent stake in the Indian unit from non-executive chairman Analjit Singh. Currently, the company directly or indirectly holds 84.5 per cent stake in Vodafone India, which the country's second-biggest mobile phone operator.
Following the completion of the deal, Vodafone Plc will be the first foreign telecom firm to gain full control of an Indian telecom operator. In October last year, the company had announced its plans to take full control of its India subsidiary by acquiring minority partners' stakes for a total of Rs 10,141 crore.
Stock in Piramal Enterprises Ltd gained 3.73 per cent to Rs 556.15 a share in afterhours trading. At one point, the stock climbed 7.63 per cent to as high as Rs 577.10 a share on the Bombay Stock Exchange.