Vodafone Group Plc. chief executive officer (CEO) Vittorio Colao plans to enter Indian market with its initial public offer (IPO). Though no date has been revealed, the issue will depend on market situation. Vodafone CEO has positive thoughts about Indian market and has started the required groundwork for the same. The share sale will enable the investors with prospects of reaping dividends.
British telecom major intends to launch INR250 billion IPO and had asked investment bank Rothschild to come up with a report about the IPO gains in May. The issue would provide the company cash for its India plans. This IPO had been anticipated for many years but was held due to regulatory and tax issues in India.
Considering the company as an intrinsic part of Digital India and Indian market as ‘New India’, Calao called the country as one of the five big pillars for the company. Last year Vodafone had invested INR85 billion in India and this year too it intends to invest the same sum. Till now INR800 billion have been investment in India. In March, the company acquired spectrum for INR259 billion and plans to expand 3G service network from existing 9 to 16 circles. The company also plans to launch 4G services in the main data markets and gradually expand.
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Vodafone is world’s second largest mobile operator and is one of India’s largest foreign corporate investors. The company has over 180 million customers in India and makes about 10% of Vodafone’s total revenue. Vodafone is second largest telecom operator in India with market share of 22.95%. Since its accession of Hutchinson’s mobile business in 2007, the company was embroiled in taxation lawsuit. Dispute regarding capital gains tax demand worth INR130 billion is yet to be determined.
Last week Vodafone won reprieve from Bombay High Court ruled in the favour of the company in relation to its tax case involving INR85 billion. Colao met finance minister Arun Jaitley and telecom minister Ravi Shankar Prasad which hints that government might refer the tax case to a judicial commission for an early verdict.