document: Vodafone lifts Essar stake by 33 % Vodafone will buy an additional 33 percent stake in its Indian joint venture for $ 5 billion -LRB- R34bn -RRB- after its partner , Essar , exercised an option to sell the holding in India 's third-largest cellular operator . The deal will raise Vodafone 's stake to 75 percent . Essar would exit the company after it implemented a put option over 22 percent of the venture , Vodafone said yesterday , while the British company exercised its call option to buy another 11 percent stake . The deal is a boost for Vodafone chief executive Vittorio Colao as Essar failed to gain a higher valuation for part of its stake in Vodafone Essar . Founded by billionaires Shashi and Ravi Ruia , Essar had an option to sell its entire 33 percent stake for $ 5bn to Vodafone or to sell a smaller stake at an independently appraised fair market value . `` The advantage for Vodafone is that they do n't have to consider the other shareholder now , '' said Macquarie Securities analyst Guy Peddy . Vodafone had already set aside the $ 5bn cash payment within its net debt of # 30bn -LRB- R328bn -RRB- . The deal would increase Vodafone 's direct equity stake in the venture to 75 percent , spokesman Ben Padovan said . The company would comply with local rules , he added . India does not allow foreign companies to own more than 74 percent in local cellular operators . `` They 'll have to sell that 1 percent to some Indian entity , or they 'll have to consider an initial public offering -LRB- IPO -RRB- , '' said MF Global analyst Naveen Kulkarni in Mumbai . Vodafone said the deal was predicted to be completed no later than November this year . Essar spokesmen Manish Kedia and Rabin Ghosh did not respond to calls for comment . Vodafone is increasing its stake in the venture in one of its fastest growing markets . India was one of the `` jewels '' in the three months to December , Colao said in February . While Vodafone is expanding in India , it is seeking to exit from French cellular operator SFR , in which it holds a 44 percent stake . Vivendi , which owns the rest , has said it wanted full control of the unit . Colao , who last year sold Vodafone 's $ 6.5 bn stake in China Mobile in his biggest divestment since he took charge in 2008 , is reviewing all the company 's minority interests amid pressure from shareholders to squeeze more out of the investments . Last year bankers had valued Vodafone Essar at between $ 13bn and $ 18bn when Essar was considering an IPO for the Indian venture , a source said earlier this year . That would have valued Essar 's stake at between $ 4.3 bn and $ 6bn . Vodafone bought 67 percent of Hutchison Essar for $ 10.7 bn in 2007 . Its outlook for India soured a year after its entry , when six new national licences were awarded . Vodafone took a $ 3.3 bn charge for the Indian unit last May , citing `` intense price competition '' . Since then , Vodafone 's service revenue from India increased by 17 percent in the financial third quarter . The Indian cellular market is forecast by Gartner in the US to exceed 993 million users by the end of 2014 . Standard Chartered advised the Essar Group on the transaction , and Vodafone used Goldman Sachs . UBS was hired as a third investment bank to help reach a valuation of the Indian joint venture . -- Bloomberg
extractive_keyphrases: holding vodafone awarded valuation initial reviewing national failed advised jewels goldman completed exercised payment british predicted implemented bankers additional essar mumbai percent equity transaction entity indian india squeeze deal divestment comply chief executive analyst standard cellular operators market independently appraised founded billionaires shareholders minority smaller investment revenue foreign companies china mobile pressure shareholder expanding spokesman growing venture cellular operator competition comment thirdlargest consider increasing spokesmen chartered increased investments increase
abstractive_keyphrases: higher valuation companies operator