New Delhi , March 1

Hutchison Essar Ltd's (HEL) shareholding is going through some major changes. Hutchison Whampoa's stake in its Indian mobile venture, HEL, has come down to 26.5 per cent, after Egypt-based Orascom acquired a 19 per cent stake in Hutchison Telecommunications International Ltd (HTIL).

Orascom now holds 10 per cent stake in HEL, even as the Ruias-promoted Essar Teleholdings has increased its stake to 33 per cent.

In another development, Kotak Mahindra Bank Ltd on Wednesday said that it has sold its entire stake of 8.33 per cent in HEL to a company owned by Mr Analjit Singh and to Telecom Investments India (TII) for Rs 1,019 crore. Mr Analjit Singh was the original founder of Hutchison Max Telecom.

Kotak Mahindra informed the Bombay Stock Exchange that the sale consideration is on the basis of an underlying value of about $6 billion for HEL, adjusted for debt and preference share liabilities in the companies, which hold shares in HEL.

HTIL was created couple of years ago as a holding company for Hutchison's stake in HEL in India and other smaller 2G cellular operations such as Israel and Hong Kong.

Over the last two years, Hutchison has gradually reduced its stake in HTIL, first through an IPO, and in December 2005 through the $2-billion sale to Orascom. Hong-Kong based Hutchison now owns only 49 per cent stake in HTIL, industry sources said.

According to the IPO prospectus of HTIL filed in Hong Kong, the company owns 53.2 per cent of HEL, of which 42.3 per cent is held directly and another 11 per cent indirectly through minority stakes in various Kotak companies.

Hutchison's actual stake in HEL is now therefore 49 per cent of 53.2 per cent, which is 26.5 per cent, said an industry source. The Essar Group, over the same period, has gradually increased its stake in HEL.

In March last year, Essar acquired 4 per cent from various Kotak companies to increase its stake from 26 per cent to 30 per cent and has recently purchased 3 per cent from Max India to increase its stake further to 33 per cent.

Industry sources said that this could further go above 38 per cent, if the Group's ongoing negotiations with other minority shareholders materialise.

Meanwhile Hutchison Whampoa Ltd said on Wednesday that HEL aimed to go public this year to help fund its expansion in the world's fastest-growing mobile market.

The company has been aiming since last year to list since last year, but the delay was caused by the wait for regulatory clarification relating to the FDI cap.