As much as 20 percent equity stake in Indus Towers was sold in block deals on June 19, with UK’s Vodafone Group being the likely seller. The deals, involving 53.30 crore shares of the mobile tower company was worth a total of Rs 17,065 crore.
Following the large deals, shares of Indus Towers fell 6% to Rs 320.60, while Vodafone Idea stock was also trading 1.3% down at Rs 16.64 at the time of writing this article.
While Moneycontrol could not immediately identify the parties involved in the transaction, CNBC-TV18 reported citing sources that Vodafone Group was eyeing to offload up to 18 percent stake in Indus Towers.
According to reports, private equity firms I Squared Capital and alternative investment firm Stonepeak were among the list of buyers vying for Vodafone’s stake in the mobile tower company.
Based on the report, Abhilash Pagaria, Head – Nuvama Alternative & Quantitative Research, anticipated a float adjustment for Indus Towers in passive indices to take place in the next few days.
He estimated a global passive flow impact of $200 million emerging out the float adjustment. As per Pagaria, an inflow of around $130 million is expected through Indus Towers’ float adjustment in the MSCI index and an influx of another $65 million through the changes on the FTSE.
It was previously reported that the Vodafone Group was planning to offload a near 10 percent stake in Indus Towers in a bid to raise $1.1 million.
Before the transaction, Vodafone PLC held 567.2 million shares or 21% stake in the tower company after it sold a 7.1% stake in early 2022.
This could be the second-largest block deal executed in India after the ITC transaction in March, where British American Tobacco Plc (BAT) sold a 3.5% stake in ITC through an open market transaction for around Rs 17,485 crore.
Buyers in the block deal will have a lock-in period of 90 days. Morgan Stanley, Bank of America, BNP Paribas, and Jefferies are the placement agents for the block deal.
Vodafone has been searching for a buyer for the remaining shareholding in the business for years. An agreement with Canadian pension fund fell through in 2022, according to media reports.
In February, KKR entity Silverview Portfolio Investments Pte Ltd sold 130.8 million Indus shares, or 4.85%, at Rs 210.21 apiece, aggregating Rs 2,749.61 crore. CPPIB had sold 57.6 million shares or 2.14% in India’s largest telecom tower company at Rs 212.15 apiece, aggregating Rs 1,223.46 crore.
Bharti Infratel and Indus Towers merged in late 2020. Airtel is the biggest shareholder in Indus, with 47.95%; Vodafone Group has 21.05%, and 30.97% is with the public, according to the tower company’s latest filing with the BSE.
Vi accounts for 35-40% of the tower company’s revenue. Ambit Capital estimates Vi still owes Indus around Rs 10,000 crore. Lately, though, Vi has begun clearing its substantial dues to Indus, boosting the tower company’s net profit in the fiscal third quarter.
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