Prospects of IPO for Vodafone India recede with merger talks

Vodafone this week confirmed that it is discussing the possibility of merging its struggling India arm with domestic rival Idea in an attempt to  create critical mass and counter the effects of the price war triggered by the entry into the market of petrochemical billionaire Mukesh Ambani’s 4G Jio network last September.
The merger talks were confirmed earlier this week after a spike in Idea’s share price. If successful, they would end hopes of the stock market flotation of Vodafone India that has been on the cards for over a year, but which were thrown into disarray by the Jio launch and its success in building up market share by offering free calls and internet access.
The deal would combine India’s second and third biggest mobile operators to create one of the largest in the world with nearly 400 million customers. Idea is listed on the Bombay Stock Exchange and is controlled by the industrial conglomerate Aditya Birla Group. It has 188 million customers, just behind Vodafone on 203 million and, like its potential merger partner, has invested heavily in building  its market position, and is now saddled with heavy debts.
Vodafone’s Indian adventure has not been without its difficulties. It has invested more than £22bn and built a strong market position, but the business is valued at only around £6bn following a series of painful multibillion-pound write-downs.

Source: telegraph