Grapevine: Google eyes stake in Vodafone Idea; lenders to sell Reliance General Insurance
Photo Credit: Reuters

Tech giant Google is looking to buy a 5% stake in mobile-phone operator Vodafone Idea Ltd, a media report said.

However, talks for the deal are at a very early stage, Financial Times reported, citing people familiar with the matter.

If the deal goes through, it would come as a shot in the arm for the joint venture of Britain's Vodafone Group Plc and India's Aditya Birla Group. Vodafone Idea has been struggling for the past many months especially after the Supreme Court ordered it to pay billions of dollars in retrospective fees to the government.

For Google, an investment in Vodafone Idea could pitch it against American peer Facebook Inc in India. The social media giant last month bought a minority stake in billionaire Mukesh Ambani-led Reliance Industries Ltd’ digital unit, Jio Platforms Ltd, for $5.7 billion.

Shares of Vodafone Idea rose 2.65% on the BSE on Thursday to close at Rs 5.82 apiece. This gives the company a market valuation of Rs 16,724 crore. A 5% stake at this price would cost Google around Rs 836 crore ($110 million).

Meanwhile, lenders of Anil Ambani’s Reliance General Insurance are looking to sell 100% stake in the company for about Rs 4,000 crore (about $530 million at current exchange rate) and are in talks with global financial and strategic investors, The Economic Times reported, citing people with knowledge of the matter.

Previously, Ambani had tried to rope in a foreign partner for the business several times, but did not succeed. Currently, non-residents are not allowed to own more than 49% in an insurer.

In February, a tribunal had upheld Nippon India Mutual Fund and Credit Suisse’s right to sell shares of Reliance General Insurance after invocation of pledge.

Reliance General Insurance’s lenders include Credit Suisse, Nippon Life, Life Insurance Corporation, apart from other banks and institutions that own non-convertible debentures of the company.

In another development, Singapore’s GIC, Oppenheimer, Canada Pension Plan Investment Board and Capital International were some of the global investors that participated in Kotak Mahindra Bank’s $1 billion (around Rs 7,500 crore) qualified institutional placement. The QIP was subscribed more than three times, persons in the know told The Economic Times.

Top mutual funds, including Aditya Birla Sun Life MF, SBI MF, HDFC MF and ICICI Prudential MF, also bought shares in the issue.

The fundraising also helped Uday Kotak to bring his shareholding down to 29% which needs to be brought down to 26% as per the guideline.

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