Vodafone said to weigh IPO for India subsidiary

Vodafone Group Plc is weighing an Initial Public Offering (IPO) for its Indian business, the wireless carrier's biggest unit by customers, said a person.

Investment bank Rothschild is compiling a report about the benefits of a possible IPO, set to be delivered around August, according to the person.

An IPO would provide Vodafone with cash while allowing investors to bet on India, whose wireless growth is outpacing that of more mature countries, such as Vodafone's home market, the UK.

Shares of Vodafone hit their highest in more than 14 years last week after comments by Liberty Global Plc's John Malone fuelled expectations the carrier will take part in the sector's consolidation.

Representatives for Vodafone and Rothschild declined comment. CNBC-TV18 earlier reported England-based Vodafone's plan towards an IPO for the India unit.

The Indian division's earnings before interest, taxes, depreciation, and amortization reached £1.28 billion ($2 billion or Rs 12,713 crore) in the latest financial year on sales of £4.3 billion (Rs 42,263 crore). The unit, which has more than 180 million customers, accounts for 10 per cent of Vodafone's total revenue. Vodafone shares have advanced 14 per cent this year, giving the company a market value of £67.3 billion (Rs 6.6 lakh crore).

Airwaves Auction

Vodafone, India's second-largest wireless operator, was among carriers spending $18 billion in the country's airwaves auction this year. Last year, Marten Pieters, head of Vodafone India at the time, said in an interview that the company won't consider an IPO of the unit until it has greater certainty about its access to airwaves.

Early this year, Indian authorities said they won't appeal a court ruling that sided with Vodafone in a tax dispute as the country works to reassure foreign investors about governance rules. The dispute involved the way Vodafone reported a transfer of shares between its business in India and another unit.