Vodafone Group dials for 100% stake

Billionaire Ajay Piramal will sell his stake in Vodafone India to its parent and British telecom giant Vodafone Plc to rake in a windfall of close to Rs 3,100 crore in just two years.

" The company has agreed to divest its entire equity stake comprising 45,425,328 shares ( 11 per cent) in Vodafone India Ltd to Prime Metals, an indirect subsidiary of Vodafone Group Plc, for a total consideration of  Rs 8,900 crore," Piramal Enterprises said in a statement on Thursday.

The deal values Vodafone India at $ 13.45 billion, which works out to Rs 1,960 per share. Piramal had picked up 11- per cent stake in Vodafone in two tranches, in August 2011 and February 2012, paying a total of  Rs 5,864 crore at  Rs 1,290 per share.

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

Piramal had created a huge cash reserve after selling his profit- making domestic pharmaceuticals business to US major Abbott Labs in September 2010 for  Rs 18,000 crore. Piramal had then said that the investment in Vodafone was to buy time till cur-

rent research activities, including the drug discovery business, were developed.

The deal with 58- year- old Piramal is a part of Vodafone's plan to take 100- per cent ownership of its Indian operations following the relaxation in foreign investment norms in the telecom sector, where the foreign direct investment ceiling was raised from 74 per cent to 100 per cent.

Max India chief Analjit Singh was the other minority shareholder in Vodafone India who already sold his stake early this year. The Piramal Group had earlier anticipated that it would exit through an initial public offer of Vodafone India shares. The Piramal Group had always maintained that Vodafone was a financial parking of resources from its deal with Abbot.

Piramal Enterprises climbed 3.73 per cent to  Rs 556.15 on the Bombay Stock Exchange, the highest level since January 22. During the day, the scrip surged 7.63 per cent to  Rs 577.10.

Piramal, who was called the takeover tycoon of the 90s as he cleverly built his pharmaceutical business through a series of acquisitions, appears to have metamorphosed into a value investor. In the last three years, he invested in a diverse businesses, including the lucrative real estate sector, information management systems, road building, truck financing and renewable energy.

Piramal says his company will continue to focus on the existing pillars of drug discovery, contract research and manufacturing, OTC drugs, information management and financial services.

Piramal recently bought 10- per cent stake in Shriram Transport and has stated that he can raise this stake.