Piramal Healthcare, headed by one of India Inc's savviest deal-makers, Ajay Piramal, has agreed to buy 5.5% stake in Vodafone Essar, one of India's largest telecom companies, for $640 million. Piramal Healthcare has agreed to buy the stake from Essar Teleholdings, which holds about 11% in the company. The deal values Vodafone Essar at about $11.6 billion, lower than the $16 billion the company fetched when UK-based Vodafone Plc agreed to purchase Essar Group's holding earlier this year. The deal took Vodafone's ownership in the Indian company to 75.35%. Piramal's purchase will help Vodafone meet regulatory requirements, which stipulate that foreign companies can only hold up to 74% in Indian telecom firms. HSBC acted as the advisor to the transaction. The lower valuation reflects increasing investor concern about the telecom sector, which is plagued by low tariffs, slowing rates of subscriber growth and declining average revenues per user, or ARPUs. It also marks a personal milestone for Ajay Piramal, who last year sold his pharma company Piramal Healthcare Solutions to Abbott for about $17 billion. He has been hunting for investment and acquisition opportunities and the Vodafone deal may fit his needs. Vodafone is considering an initial public offering (IPO) some time next year, which could give Piramal an opportunity to exit at a tidy profit if valuations don't fall further. It is understood from television reports that Vodafone and Piramal have also agreed that if the company does not do an IPO within two years, Piramal will get $900 million in cash. However, Piramal Healthcare CFO Rajesh Laddha denied any such clause. The other Indian investor in Vodafone Essar is IDFC, which is a majority stakeholder in a subsidiary that owns around 15% stake in Vodafone India.crackcrack
| Company Name | CMP |
|---|---|
| Bajaj Finance | 908.70 |
| Shriram Finance | 1036.50 |
| Aditya Birla Capital | 340.20 |
| Chola Invest & Fin. | 1579.65 |
| Tata Capital | 337.60 |
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