Piramal Healthcare will pick up a further 5.5 per cent of the issued equity share capital of Vodafone India (VIL) from ETHL Communications Holdings Limited (Essar) for a consideration of around Rs.3,007 crore. The gross assets of Vodafone India have been valued at Rs.59,200 crore as at the end of March 31, 2011. The latest share buy announcement will take Piramal's stake in VIL to 11 per cent.
The deal is a sequel to the settlement arrived between Vodafone and Essar in July 2011 for the sale of Essar's about 33 per cent stake in VIL. The deal also provides Piramal exit mechanisms such as participation in a potential initial public offering (IPO) of VIL and stake sale to Vodafone.
Piramal Healthcare, it may be recalled, had sold its Indian formulations business to Abbott Laboratories of the U.S. for Rs.17,000 crore in May 2010. The company also had sold its diagnostics business, Piramal Diagnostic Services, to Super Religare for Rs.600 crore in July 2010.
Piramal Healthcare had, in August 2011, acquired about 5.5 per cent stake in VIL from Essar for around Rs.,800 crore. At the time of picking up the initial 5.5 per cent in VIL, Ajay Piramal, Chairman of Piramal Group, had said that the surplus cash with Piramal Group would be deployed in various ventures. He said he was looking at an investment horizon of 12-24 months and expecting returns in the range of 17-20 per cent on the investment.
