Vodafone-Essar may bring IPO

Vodafone Plc is discussing whether to have an initial public offer (IPO) for Vodafone-Essar.

"All options are open. An IPO is one of them and that is under preliminary discussions. We have time till May 2011 to decide on that (put option)," Essar Group Chief Executive Prashant Ruia told reporters.

Under the 2007 agreement between Vodafone and Essar, the latter has a put option of divesting its stake in the telecom venture.

The option expires in May 2011 and Essar has to decide whether to exercise it within a one-year window which opened on May 8, 2010.  

Essar's 33 per cent stake in the joint venture is valued at about $5 billion (Rs 23,000 crore).     

"We have a partner here. We will decide together what to do," Vodafone chief executive Vittorio Colao said when asked about the IPO of Vodafone Essar.

On the pending income tax tax issue on the 2007 deal, Colao said, "We continue to be convinced and advised that no tax is due. We have made an acquisition in this country. We have not sold assets. We have confidence in the court process. India has a very solid legal system."

Adding: "We need stable policies. We need investment-oriented policies. Players like us who believe in this market, who invest in this market, who have brought competition in the market, should be allowed to continue the investment strategy."