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.