Mumbai: Vodafone Group intends to divest its entire $2.3 billion stake in India’s Indus Towers through stock market block deals next week, sources familiar with the matter revealed. This move is part of the British telecommunications giant’s strategy to reduce debt.
Currently, Vodafone holds a 21.5% stake in Indus Towers through various group entities, valued at $2.3 billion based on Friday’s closing stock price in Mumbai.
The sources, who spoke on condition of anonymity due to the private nature of the discussions, indicated that the final size of the stake sale has not been finalized and could be less than 21.5% depending on market demand, which is still being assessed.
Following the Reuters report, shares of Vodafone Idea saw an increase, rising up to 4.8%, while Indus Towers saw a more modest gain, closing up 0.3%.
Both Vodafone India and its British parent declined to comment on the matter, while Indus Towers also refrained from making any statements.
To manage the stake sale in Indian stock markets, Vodafone has enlisted Bank of America, Morgan Stanley, and BNP Paribas, according to the sources. Bank of America declined to comment, and the others did not respond to Reuters’ requests for comment.
Initially announced in 2022, Vodafone had planned to sell its then-28% stake in Indus Towers, but has so far only managed to sell a small portion. Discussions with rival telecom firms for the stake sale did not materialize, the sources added.
The proceeds from the stake sale are earmarked to partially repay Vodafone’s substantial net debt of $42.17 billion, the sources disclosed.
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Indus Towers, touted as one of the world’s largest tower companies, counts Bharti Airtel, India’s second-largest telecom firm, among its shareholders. It operates nearly 220,000 towers and provides essential services such as power supply, space, and green technology for tower equipment.
Previously, private equity firm KKR and Canada Pension Plan Investment Board (CPPIB) were also investors in Indus Towers but divested their entire stakes in February.
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Block deals, where investors sell shares directly on stock markets, have gained popularity in India amid record-high market levels. In a similar move in March, British American Tobacco sold its entire $2 billion stake in Indian tobacco company ITC.
According to regulatory filings, Indus Towers reported a 20% increase in net profit to $221 million for the March 2024 quarter, with revenue remaining stable at $860 million.
