Vodafone Group sells 18 pc stake in Indus Towers to raise Rs 15,300 crore

Vodafone Group Plc is further cutting its stake in India's largest telecom tower company, Indus Towers, as the British telecom giant looks to pare bank borrowings.

On Wednesday, Vodafone said it sold 484.7 million shares amounting to 18 per cent stake in Indus Towers, raising Rs 15,300 crore or around €1.7 billion. The shares were sold through block deals on the stock exchange.

Vodafone had initially planned to sell around 10 per cent, but strong investor interest prompted it to raise it significantly, according to Reuters.

Post this stake sale, Vodafone will now only be holding 82.5 million shares or 3.1 per cent stake in Indus Towers.

Indus has over 2,19,736 towers and a presence across all the 22 telecom circles. Bharti Airtel, India's second-largest telecom operator, is the largest shareholder in the company with a stake of 47.95 per cent. While Vodafone was cutting its stake, Bharti Airtel, on Wednesday, acquired 26.95 million shares or 1 per cent additional equity in Indus Towers via open market operations.

Vodafone had announced in 2022 that it intended to sell its entire stake in Indus Towers. The proceeds from Wednesday's share sale will be used to substantially repay its existing lenders in relation to the outstanding bank borrowings of €1.8 billion secured against Indian assets, Vodafone said in a regulatory filing.

Vodafone had, a few years ago, already written off the value of much of its investments in Vodafone Idea, its telecom joint venture with Aditya Birla Group in the backdrop of rising competition and losses in the Indian unit.

Mounting losses at Vodafone Idea (VI) had also hurt Indus Towers hard as VI was the second largest tenant. VI raised Rs 18,000 crore through a follow-on share sale in April. Analysts at BNP Paribas said in their report that the fund raise by VI would be a "game changer" for Indus Towers as it would be able to collect its past dues and get incremental business from VI.

At the same time, Bharti Airtel, over the last few quarters, accelerated its tower investments to expand its rural 4G footprint, which resulted in stronger tower additions for Indus Towers, the analysts noted.

On Wednesday, Indus Towers shares fell almost 7 per cent to a intra-day low of Rs 320.60 on the BSE, before recovering some of the losses. They were trading at Rs 334.50, down 2.7 per cent in the afternoon. Vodafone Idea shares were up 2.4 per cent at Rs 17.26 and Bharti Airtel traded down 1.9 per cent at Rs 1,402.15.