Kotak exits Hutch, nets Rs1,019 crore
02 Mar 2006
The Kotak Mahindra group has divested its entire holdings in mobile operator Hutchison Essar Limited (HEL). The 8.33 per cent beneficial stake in Hutchison Essar was sold to Analjit Singh of Delhi-based Max India and Telecom Investments India for Rs1,019 crore. Analjit Singh has made this investment in his personal capacity.
The holdings of Kotak Mahindra group in HEL were held by Kotak Mahindra Bank, subsidiaries of the bank and various investment companies of the group. Out of the Rs1,019 crore received from the sale, Kotak Mahindra Bank's pre-tax profit share would be Rs392 crore.
The Max group was one of the original promoters of Hutchison Max Telecom, the company which operated the Delhi circle. The group sold a 3- per cent stake to the Essar group last year.
Subsequently, the different companies operating under the Hutch umbrella was merged into Hutchison Essar last year. HEL later acquired the GSM mobile operator BPL. Now HEL has a presence across the country in most of the telecom circles.
The deal values HEL at around $6 billion, adjusted for debt and preference shares. The company's bigger competitor Bharti is currently valued at over $15 billion. Bharti had a total GSM subscriber base of 17.37 million as of January 2006 while HEL had a total subscriber base of 15.08 million including BPL.
Subsequent to this transaction the major shareholders of HEL are:
| Shareholder | % stake held |
| Essar Group | 33 |
| Hutchison | 26 |
| Orascom | 10 |
| Analjit Singh & Telecom Investments | 8 |
| Hinduja Group | 5 |