Softbank may pick up minority stake in Vodafone India. Here’s the latest development

Softbank is in premature talks to buy a stake in Vodafone India, which is likely to be merged with Idea.

As per reports, Softbank is looking to take a minority stake of around 20% in the Vodafone-Idea merged entity.

If the deal goes through, selling off shares will mean Vodafone India will have below 50% shareholding in the merged company. This will give it room to de-consolidate its debt ridden Indian operations from its books. It could also pave the way for Vodafone's gradual exit over a period of time from India. The UK company's $28 billion India bet has yielded no profits so far.

"Even though some other large financial institutions and funds have been tapped, discussions with Softbank are fast progressing fast. It could come in a significant investor with a minority stake of between 15-20% stake in the company,” ET quoted people aware of the development as saying.

People close to Softbank had told told ET last month that its Vision Fund, which is being helmed by Indian-born Rajeev Mishra, could scout for buyout deals in the country, including in the telecom sector. A stake in the Idea-Vodafone combine will give the fund a strong foothold in what will be India's largest telco, both by subscribers and by revenue market share.

There have been some media reports that the two companies may announce further progress on merger talks this month, but this could not be confirmed.

Meanwhile, Softbank is active in the telecom space in the US where it has invested in Sprint and is in talks to merge this with T-Mobile.

Softbank's Son has been a big backer of Internet and communications services. The company has invested in Indian consumer internet startups such as Snapdeal and Ola and an investment in what will be India's largest telco will deepen its presence in the country.

Softbank, Vodafone Plc and Idea Cellular did not comment on the development so far.