Vodafone buys into India

For all its global assets, India was one of the countries that was conspicuously missing from Vodafone’s global footprint. World’s largest wireless operator changed all that, and bought a 10% stake in Bharti Telecom, one of the largest GSM operators in India. Vodafone paid $1.5 billion for that stake. Singapore Telecom is the other major holder in the company. The two companies now own about 45.9% of the company. Singapore Telecom, Fidelity and Capital recently bought 9.3% of the company from Warburg Pincus. (Funny, Vodafone sold their stake in RPG Cellular last year, so what made them change their mind?)

The Economic Times says Warburg Pincus, a US-based private equity company has been able to get six-times return on their investment in the company. They had acquired about 18% stake in Bharti for $300 million. They sold 5.6% of their stake to Vodafone for about $847.5 million, and cashed about 3.35% of their stake at the time of the IPO for $200 million.

The flurry of deals should not come as a surprise – Indian Government just eased limitations on the foreign direct ownership in Indian telecoms to 74% from 49%. With this deal, Bharti is now being valued at $15 billion, for a company with around 20 million subscribers.