The Government may put on hold its plans to sell equity stake held by Telecom Consultants India Ltd (TCIL) in Bharti Hexacom, due to lack of consensus on pricing. TCIL owns 30 per cent stake in Bharti Hexacom, while the balance is with Bharti Airtel.

Independent consultants

While independent consultants appointed by TCIL had suggested a base price of Rs 1,800 crore for the 30 per cent stake, various Members of Parliament suggested that the Government should collect over Rs 10,000 crore from the buyer based on the Hutchison-Vodafone deal. Vodafone paid $19 billion for 23 million subscribers.

Bharti Hexacom offers mobile services in Rajasthan and has close to 13 million subscribers. Between April 1, 2010 and December 31, 2010, Hexacom had reported turnover of Rs 1,782 crore and profit before tax of Rs 407 crore.

Suggestions were also made by some MPs that TCIL should not exit Hexacom at the moment since the mobile market was still growing. In 2009, the Cabinet Committee on Economic Affairs had given its nod to TCIL to exit the venture. TCIL had sought dividends pay out while adopting Annual Accounts every year, but this was not agreed to by the Bharti Group on the ground that BHL was using all its internal generations for expansion of network to keep pace with the intense competition in the market. TCIL has neither received any return on its investment nor had effective say in the company.

TCIL sought listing of BHL so that they could exit at the buoyant prices of mobile companies prevalent in India. This was also declined by the Bharti Group on the ground that their flagship company Bharti Airtel Ltd is already listed and as such their policy does not permit subsidiaries being listed.

Last year, after the Department of Telecom invited bids for the stake 5 companies had evinced interest, but only two put in their bids. But both these bidders — Bharti Airtel and Punj Lloyd — have withdrawn their bids on grounds that the Government was taking too much time in deciding the pricing scheme.

Highly placed Government sources said that a committee will now look into the issue afresh and recommend as to whether it would be appropriate to go ahead with the stake sale.

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