In Short:
UK-based telecom operator Vodafone PLC is selling a 9.94% stake in Indus Towers through block deals valued at up to $1.09 billion. Vodafone PLC holds 21% stake in the tower company. Bharti Infratel and Indus Towers merged in 2020. Vi accounts for 35-40% of Indus Towers’ revenue. Vi owes Indus around Rs 10,000 crore, but has begun clearing dues, boosting Indus Towers’ net profit.
Vodafone PLC to Sell 9.94% Stake in Indus Towers
UK-based telecom operator Vodafone PLC is set to sell a 9.94% stake in Indus Towers on Wednesday through block deals, according to sources familiar with the deal. The shares are being offered in the range of Rs 310 to 341, representing a discount of 9.9% to 0.8% to Tuesday’s closing price. The deal is valued at up to $1.09 billion, as per the term sheet.
Details of the Deal
Vodafone PLC currently holds 567.2 million shares or 21% stake in Indus Towers after selling a 7.1% stake earlier in 2022. The block deal is being managed by Morgan Stanley, Bank of America, BNP Paribas, and Jefferies.
The largest block deal prior to this was made by British American Tobacco Plc (BAT) when they sold a 3.5% stake in ITC through an open market transaction in March, amounting to Rs 17,485 crore.
Previous Stakeholder Attempts
Vodafone has been looking to offload its remaining shareholding in Indus Towers for some time now. A deal with a Canadian pension fund fell through in 2022, according to reports.
Recent Developments
In February, KKR entity Silverview Portfolio Investments Pte Ltd sold 4.85% of Indus shares at Rs 210.21 apiece, while CPPIB sold 2.14% at Rs 212.15 apiece. Bharti Infratel and Indus Towers merged in late 2020, with Airtel being the largest shareholder in Indus.
Vodafone accounts for 35-40% of Indus Towers’ revenue, with Ambit Capital estimating that Vodafone still owes around Rs 10,000 crore to Indus. However, there has been a recent increase in payments from Vodafone, boosting Indus Towers’ net profit in the fiscal third quarter.
As of December-end, Indus Towers operated 211,775 towers, with Bharti Airtel and Vodafone as its main customers.
