Essar Steels - Faridabad
About Essar Steels
One of Essar’s strengths has been its ability to invest in businesses that have the potential for growth and its strategy to diversify as a hedge against cyclicality. In 1995, a few months after mobile telephony was opened up to private participation, Essar became the first company to start GSM operations in Delhi under the brand name, Essar Cellphones. Since Essar did not have prior experience in this industry, it roped in Swiss PTT as a joint venture partner. Essar then acquired licenses for Eastern UP, Rajasthan, Haryana and Punjab.
In those early days of the telecom boom in India, effective policies were lacking and private telecom businesses were faced with several problems. In 1999, the government announced a new telecom policy that was more conducive to growth. Essar braced itself for the oncoming challenge. However, Swiss PTT wanted to shut shop as part of its strategy to exit all Asian operations.
Essar replaced Swiss PTT with Hutchison as partner. The joint venture company then went about consolidating operations and acquiring various telecom circles. In 2005, when the government came out with the unified licensing scheme, the JV started merging all the telecom circles. By 2006, all the circles were under one umbrella—Hutchison Essar Limited. Essar owned 33% stake in the consolidated entity. Independently, Essar had acquired licenses in seven circles where Hutchison Essar did not have operations, and in four circles of BPL. Essar merged these circles into Hutchison Essar to create a telecom major.
In 2006, Hutchison, too, decided to exit India. Essar wanted to buy out Hutchison’s stake and tied up a line of credit of over USD 11 billion. After a fierce round of bidding that involved several corporations, Vodafone bought the Hutchison stake valued at USD 11.5 billion.
What started out with an initial investment of USD 800 million had reached a valuation of USD18.8 billion in just six years. Hutchison Essar’s subscriber base, too, has risen from 1,50,000 to 28 million. Thus Essar was able to build one of the most valuable telecom companies in the world. Now, Essar is all set to team up with the new JV partner Vodafone to take growth to the next level.
Contact Essar Steels
| Address : | Rajiv Gandhi Colony, New Industrial Town, Faridabad, Haryana 121001, India |
| Postal code : | 121001 |
| Website : | http://www.essar.com/ |
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