Indus Tower tanks as Vodafone decides to sell a partial stake in the company worth USD 200 million

Vodafone announced that it has launched a placing of 6.36 crore Shares (representing a 2.4% stake) in Indus through an accelerated bookbuild offering of Indus' outstanding share capital.

The stake sale will be done in a block deal today, with an offer range of Rs 227-231 per share. The magnitude of the offer is estimated to be around Rs 1,440 crore.

Vodafone Group Plc holds 757.8 million shares in Indus Towers, equivalent to a 28.1% shareholding. 19.07 crore of these shares, equivalent to a 7.1% shareholding, are currently pledged to Indus as part of the security arrangements entered between Vodafone and Indus at the time of the merger of Indus Towers with Bharti Infratel.

The remaining 4.7% (of 7.1% pledged) are also proposed to be sold by Vodafone to one of the largest shareholders in Indus, which is in the advanced stage of discussion. It could raise to Rs 4,300-4,400 crore through these stake stales. In addition, Vodafone is also in discussions with several interested parties in relation to a potential sale of the Residual Shareholding of 21%.

Indus Towers Ltd (formerly Bharti Infratel Ltd) is a telecom tower infrastructure service provider that deploys, owns and manages telecom towers and communication structures, for various mobile operators.

As Government of India is set to become the largest shareholder of Vodafone Idea (Vi) through the conversion of USD 2.1 billion of AGR and spectrum interest into equity. Vodafone and ABG intend to contribute towards an issue of equity shares by Vi by raising funds through stake sale in Indus Tower.

Indus Tower shares deep-dived 15% from yesterday’s close of Rs 251.20 logging a low of Rs 213.20. At 10.54 am the shares were trading at Rs 214.95 apiece.