Vodafone to Offload Entire $2.3 Billion Stake in Indus Towers to Slash Debt

Mumbai: Vodafone Group plans to sell its entire $2.3 billion stake in Indus Towers, an Indian mobile tower operator, next week through block deals on the stock market. This move is part of Vodafone’s strategy to reduce its debt.

Details of the Stake Sale

• Stake Size: Vodafone owns 21.5% of Indus Towers through various group entities. At the closing price on Friday, this stake is valued at $2.3 billion.
• Sale Process: The exact amount of the stake sale hasn’t been finalised and could be less than 21.5% if there isn’t enough demand. The decision on the size will depend on market interest, say sources familiar with the matter.

Management and Responses

• Advisors: Vodafone has hired Bank of America, Morgan Stanley, and BNP Paribas to manage the sale in the Indian stock market.
• Comments: Vodafone India and its UK parent company did not immediately comment. Indus Towers also declined to comment. Bank of America had no comment, and the other banks did not respond to Reuters’ requests for comment.

Background

• Previous Plans: In 2022, Vodafone announced plans to sell its entire then-28% stake in Indus Towers, but only managed to sell a small part so far. Talks with rival telecom firms to buy the stake did not succeed.
• Debt Reduction: Vodafone aims to use the proceeds from this sale to help pay down part of its $42.17 billion net debt.

About Indus Towers

Indus Towers, one of the world’s largest tower companies, has nearly 220,000 towers and provides power, space, and green technology for tower equipment. It also counts India’s second-largest telecom firm, Bharti Airtel, as a shareholder. In February, private equity firm KKR and Canadian fund CPPIB sold their entire stakes in Indus.

Market Context

Block deals, where large quantities of shares are sold directly in the stock market, are becoming more common in India, especially as the market hits record highs. For instance, in March, British American Tobacco sold its entire $2 billion stake in Indian tobacco company ITC.

For the March 2024 quarter, Indus Towers reported a 20% increase in net profit to $221 million, with revenue remaining flat at $860 million, according to regulatory filings.