Vodafone hits Indian ownership limit

Mega carrier Vodafone has upped its interest in Indian operator Vodafone Essar from 41 per cent to 63 per cent at a cost of around $3.32bn.

As a result of the deal, Vodafone will own 74 per cent of Vodafone Essar via its subsidiaries, with the remaining 26 per cent controlled by Indian shareholders.

Vodafone has been slowly increasing its holding in the Indian venture since its 2007 $11.7bn acquisition of Hutchison’s stake in the Indian carrier. Indian foreign ownership rules limit direct investment at 74 per cent, so Vodafone has now hit its ceiling.

Vodafone Essar has around 142 million subscribers, putting it at third place in the country behind Bharti and Reliance.