On Wednesday, Vodafone said it sold 484.7 million shares amounting to 18 per cent stake in Indus Towers, raising Rs 15,300 crore or around €1.7 billion. The shares were sold through block deals on the stock exchange.
Vodafone had initially planned to sell around 10 per cent, but strong investor interest prompted it to raise it significantly, according to Reuters.
Indus Towers intimation:
How much of a positive will this be for Indus Towers, if this happens?
"Bharti Airtel had bought 1 percent additional stake in Indus Towers in the transaction, taking its holding in the towers company to nearly 49 percent. The proposed additional stake acquisition would make Bharti Airtel the majority stakeholder in Indus Towers with a 52 percent shareholding.
Airtel plans to Indus Towers with its data centre business Nxtra, reported CNBC TV18. Further, Indus Towers cash would be used for Nxtra expansion, said the report. Airtel aims to make its telecom business asset light via Nextra and Indus Towers merger.
Consolidation of the majority shareholding in Indus Towers, and then merging it with the data centre business is apparently part of Bharti Airtel’s mega plan to of two-pronged strategy to capitalise on Indus Towers.
On the other hand, Vodafone is likely to use stake sale proceeds to pay dues to Indus Towers. A recent Reuters report had said that Vodafone Group was looking to sell its entire $2.3 billion stake in Indus Towers as part of a strategic move to pare its hefty debt.
One should also see it as poison pilling from a competition point of view. If Reliance had bought it out, it’s tower count would have jumped big and also push Airtel to spend even more to catch up. This move should be seen as “what if I don’t buy it but my competitor does?”
Indus Towers expects growth as Airtel, Vodafone Idea expand: Analysts
