Indus Towers Share Price Takes A Dive Amid Reports Of Block Sale By Vodafone Group

Shares of Indus Towers were sliding on Wednesday amid reports that Vodafone Group was likely to sell a stake in the firm in a block deal.

What Happened: UK-based Vodafone Group is set to sell a 9.94% stake in Indus Towers through a bulk deal, with shares priced between ₹310 and ₹341 each, valuing the transaction between $996 million (₹8,304 crore) and $1.1 billion (₹8,337 crore), according to media reports.

This move follows reports that Vodafone Group, which holds a 21.5% stake in Indus Towers through various entities, is aiming to reduce its stake in the telecom tower provider. Private equity firms I Squared Capital and Stonepeak are reportedly potential buyers.

Indus Towers, India’s largest telecom tower provider, operates over 219,736 towers across all 22 telecom circles. Bharti Airtel is the largest shareholder with a 47.95% stake. Earlier reports had indicated that Vodafone Group planned to sell its entire stake in Indus Towers, valued at $2.3 billion (₹19,176 crore), via a block deal.

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In 2022, Vodafone Group sold over 7% of its stake in Indus Towers, with 4.7% acquired by Bharti Airtel. The proceeds from that sale were directed towards reducing Vodafone Idea's debt, which currently stands at over ₹2.1 lakh crore.

Vodafone Group has pledged its stake in Indus Towers to address dues of approximately ₹10,000 crore owed by its Indian arm, Vodafone Idea, to the mobile tower operator. It remains unclear whether the proceeds from this current sale will be used to repay these dues.

Vodafone Idea, a significant customer of Indus Towers, recently raised ₹18,000 crore in India’s largest follow-on public offer (FPO) in April. However, CEO Akshaya Moondra clarified that these funds cannot be used to settle the dues to Indus Towers. Bharti Airtel's chairman, Sunil Mittal, has insisted that Vodafone Idea must pay its outstanding dues to Indus Towers to avoid service disruptions.

Price Action: Indus Towers’ share price was down 6.27% at ₹322.95 near the start of trade on Wednesday. Meanwhile, Bharti Airtel shares were down 0.17% and Vodafone Idea shares were down 0.71%.

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