Hutch Telecom shares drop 12 pct after India deal

HONG KONG, Feb 13 (Reuters) Shares in Hutchison Telecommunications International Ltd. fell around 12 percent on Tuesday, following the US.1 billion sale of its controlling stake in India's No. 4 cellular operator, Hutchison Essar, to Britain's Vodafone Group Plc. .

Analysts said that Hutchison Telecom was selling a major growth driver and Credit Suisse maintained its ''underperform'' rating on the shares, saying the stake sale price may have been less than what the market was expecting.

Hutchison Telecom said on late Monday that it would earn a pretax profit of US.6 billion from the sale of the 67 percent stake in Hutchison Essar.

Its shares were off 11.9 percent at HK.92 after hitting an intraday low of HK.52, while shares of parent Hutchison Whampoa Ltd. were off more than 1 percent at HK.85.

Merrill Lynch said in a research note that it was raising its price target for Hutchison Whampoa to HK from HK following an upward net asset value revision to reflect the latest market value of Hutchison Telecom, CKI Holdings and Husky Energy Inc. .

Merrill noted that Hutchison Telecom was selling off a unit that had accounted for 77 percent of its earnings before interest and tax in the first half of 2006.

ADRs in Hutchison Telecom , the emerging markets mobile arm of Hong Kong-based Hutchison Whampoa, fell nearly 6 percent.

Hutchison Telecom shares had risen 45 percent from a June low through Friday in anticipation of a sale of its Indian business.

REUTERS PV DS1301