Vodafone may take the IPO route in 2013: Analjit Singh

Excerpts from Midcap Radar on CNBC-TV18 Watch the full show »

Talks of Vodafone taking the IPO route started arising post the Supreme Court tax verdict and Piramal Healthcare 's acquisition of an additional 5.5% stake in Vodafone India. However, the company has refuted the claim, saying Vodafone's Indian IPO won't take place until next year.

Analjit Singh, non-executive chairman of Vodafone India who holds a 3% stake in Vodafone India tells CNBC-TV18 that there is room for Vodafone to increase its shareholding. Vodafone's application is with the government to enter through the FIPB route. "Until we reach a stage where Vodafone exhausts all that's available to it in terms of FDI, it's unlikely that you will see other major changes in the shareholding pattern," he says.

Below is an edited transcript. Watch the accompanying video for more.

Q: You have been appointed the non-executive chairman of Vodafone. How should we read this appointment? Is this preparatory to the company looking for listing in India?

A: Well, in terms of how you read it I think it perhaps goes back to founding the company and being closely associated with it even after my exit. I have been sort of quite an integral part of Vodafone's entry since 2007. I am particularly delighted that there is once again a passionate and natural owner of this company and nobody better than Vodafone to be in that position and to be able to drive it now single handedly as they have total control of the company with the few partners that we are in India.

Yes, the information is out in the public domain that there is thinking around the idea of an IPO. We are studying it right now. No definitive plans have been made or have any dates been set. But yes, it's on the cards. We will see over the next year or so how things pan out.

Q: There has been a court case which has decidedly put the company on the front foot. Markets are not doing too badly after a long lean phase. Since you have been so closely associated with the company before you were named non-executive chairman - is it being advanced the process of listing?

A: I don't think quite honestly we are there yet to say that it is being advanced but it is cooking, we are planning. Things take time. The judgement and other things happened barely a fortnight ago so we will be in a better position to talk maybe three months from now. But work is afoot in that direction.

We will have to see if the current trends are sustainable and the market conditions remain conducive and the growth continues as you have seen in the results that the topline revenue for Vodafone India grew 6%. We just have to wait and watch but efforts are afoot.

Q: Late in the 1990s when you were at the height of your success in the telecom business you chose to exit and now you have made an entry. Do we see this as the bottoming out of the weak policy environment or the regulatory headwinds that the telecom sector is facing? Do you think the telecom sector is bottoming out now?

A: I think from really being the charm or the golden goose of the country in terms of how technology-wise this sector helped to leapfrog, from a penetration point of view, from the quality of service network etc some of that got marred with the entry of so many operators etc. You have seen the events of the last one week, 10 days. So I think certainly it's a part of the cleansing process.

It's certainly perhaps the sheen will revert back to the telecom sector as now the major players like Vodafone, Bharti etc are back focusing on their growth and they have seen robust growth in the last quarter etc. So I hope that what we have seen in the recent past will be behind us and that this particular industry will regain some of its lost sheen. Yes, net-net the answer is we all hope that.

Q: Piramal Group has raised its stake in Vodafone and doubled it. You are long associated with the industry and the company. Will you also be doing something similar, a pre-IPO increase?

A: Not necessarily. There is headroom available for Vodafone to increase its investment. We are at the application stage within the Government of India through Foreign Investment Promotion Board (FIPB) etc for Vodafone to get approval to increase its shareholding. Until we reach a stage where Vodafone exhausts all that's available to it in terms of FDI, it's unlikely that you will see other major changes in the shareholding pattern other than Vodafone clawing up to whatever is the permissible limit which is under discussion with the government right now.

Q: We have seen a lot of hoopla on FDI in retail. Has that sort of dampened hopes on the possibility of raising FDI in insurance? What are your expectations? Are you expecting something in the near-term?

A: Frankly, FDI in multi-brand retail and FDI in insurance have nothing to do with each other. My reading of the tea-leaves is that FDI in insurance is not inevitable. In other words it's not on the cards. It's very complicated. We know the views of the opposition. There is lack of unanimity even within the insurance sector in terms of who wants what. So I don't see a change in FDI being eminent in the near future.