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British telecom giant Vodafone Group Plc is selling 10 per cent stake in Indus Towers, a telecom tower firm, to raise up to Rs 9,000 crore via block deals on Wednesday.
According to the terms of the transaction, the shares are being offered at a discount of 10 per cent to Tuesday's closing price of Rs 344 a share.
Shares are being offered at the rate of Rs 310-341 a share. The company's total market valuation was Rs 92,679 crore as on Tuesday.
Vodafone Group Plc currently owns 21.5 per cent stake in Indus via various group entities. It will use the proceeds to repay its own debt.
BoFA Securities India, Morgan Stanley India Company, Jeffries India and BNP Paribas Securities India are managing the sale, according to the terms of the transaction, which was reviewed by Business Standard. Emails sent to Vodafone Group PLC and Indus Towers did not elicit any response.
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Apart from Vodafone Plc, Bharti Airtel also owns a 48 per cent stake in Indus Towers, which has 220,000 towers across India.
Vodafone Group Plc has also diluted its stake in Vodafone Idea, a mobile phone service provider, after the Indian company raised Rs 18,000 crore via a follow-on offer.
Post the offer, Vodafone Plc stake has been diluted to 18 per cent in Vodafone Idea. Vodafone Idea plans to use the proceeds to launch its 5G-based telecom services in India.
In May, Vodafone Idea had reported a net loss of Rs 7,674.6 crore, widening by 19.5 per cent in the fourth quarter of FY24 from Rs 6,418.9 crore in the corresponding quarter of FY23. It was because of higher expenses and stalling revenue.
For FY24, its net losses expanded to Rs 31,238 crore, up 6.6 per cent from Rs 29,301 crore in FY23.
Vodafone Plc has taken a decision not to invest further in India after its Indian arm reported huge losses. Since 2022, it has reduced its stake in the tower company from 28 per cent and sold shares via block deals.
With this latest sale of stake, Vodafone Plc’s stake will fall to 11 per cent.
The share sale comes at a time when analysts say Indus Towers has seen improvement in its share of Airtel’s new tower rollout and with its collections normalising post Vodafone-Idea equity raise, it is well placed to continue with dividends in FY25.
Besides, Airtel accelerated its tower investments in recent quarters to expand its rural 4G footprint, which resulted in stronger tower additions for Indus Towers as well.
Airtel expects further network expansion in five key circles where its tower footprint is smaller than Jio’s.
“We expect tower additions by Indus Towers to remain strong in the near term,” said an analyst with BNP Paribas in a report in May.
