Vodafone says preparations on for an IPO
At the top of its expected price range of $34 to $38 per share, the offering could reap a $16 billion windfall for Facebook and its selling shareholders.
Vodafone India, which is fighting the government on the issue of tax on its acquisition of Hutchison's stake in Hutchison-Essar in 2007, on Thursday said preparations are on for an initial public offer, but shareholders will take a final call on the public float.
"It is for our shareholders to decide on the initial public offering (IPO). However, preparations are on," Vodafone India managing director and chief executive Marten Pieters said at an event to launch the company's customer enterprise centre.
He also said the company has made an overall investment of Rs 50,000 crore since it began operations here in 2007.
"We will be recruiting 600 people this year," he added.
He parried a question on whether the company has decided to delay its IPO to the next fiscal.
Before the tax controversy and the Trai's recent recommendations to increase the base spectrum price by 10-fold, the second largest mobile operator had said that it would hit the markets this fiscal.
The British telecom giant Vodafone had acquired Hutchison stake in Hutchison Essar in 2007. It got mired in a controversy over withholding tax. The matter went to court and the Supreme Court had ruled in its favour. The government now is amending the IT Act to bring into tax net Vodafone-like deals with underlying assets in India.
Stating that cheaper spectrum is a pre-requisite for viability of its operations, Pieters said: "We need a lot of spectrum if we want businesses to succeed. The country needs to be competitive to attract investments."
Recently, regulator Trai has recommended a base price of Rs 3,622 crore per megahertz (MHz) for pan-India spectrum for 1800 Mhz band (being used for GSM service). This is almost 10 times higher than the price at which 2G licences bundled with 4.4 MHz spectrum were allocated in 2008 by then telecom minister A. Raja.
GSM operators umbrella body, COAI had recently said that if the government accepts the Trai proposal on spectrum pricing, call rates will jump by at least 50 per cent.
Vodafone had earlier this month effected a 20 per cent spike in postpaid tariffs.
When reporters persisted with questions regarding tariff hikes, the Vodafone spokesman threatened to call off the press meet.
"I will have to close this media interaction immediately," Vodafone India spokesperson Suresh Rangarajan told reporters when they persisted with tariff-related queries.
At present, the centre contributes to less than 10 per cent to the company’s revenues, Pieters said. "The operations of the customer experience centre has broken even," he said, without giving any specific figures.