Indus Towers Block Deal: Vodafone Group Sells 20% Stake for Rs 17,065 Crore

Bharti Airtel said shortly after block deal that it will purchase 1% of Indus Towers. Investment firms such as I Squared Capital & Stonepeak were apparently interested in Vodafone's share in mobile tower game, in addition to telecom provider.

On June 19, block transactions were used to sell up to 20 percent ownership investment in Indus Towers, with UK's Vodafone Group purchasing about 18 percent of that amount. Deals of ₹ 17,065 crore involved 53.30 crore shares of mobile tower company.

Vodafone Group intends to utilize ₹ 15,300 crore it obtained from sale of its stake to pay back its current lenders. Following stake sale, company's holding of Indus Towers likewise decreased to 3.1%.

Bharti Airtel said shortly after block deal that it had purchased one percent ownership holding in Indus Towers. Reportedly, among buyers contending for Vodafone's share in cell tower company were alternative investment firm Stonepeak & private equity firms I Squared Capital.

In addition to causing spike in volume, block deal caused stock to drop by about 10%, reaching low of ₹ 311.40 on NSE. 78 crore shares have exchanged hands in counter thus far, sharp increase from two crore shares moved daily on average over previous month.

According to report, Indus Towers' float adjustment in passive indices was expected to occur within next few days, according to Abhilash Pagaria, Head of Nuvama Alternative & Quantitative Research.

He calculated that $200 million in worldwide passive flow impact would result from float correction. According to Pagaria, modifications on FTSE are likely to bring in additional $65 million, & Indus Towers' float adjustment in MSCI index is expected to bring in about $130 million. According to earlier reports, Vodafone Group intended to sell off over 10% of its share in Indus Towers in effort to raise $1.1 million. As part of calculated strategy by British company to address its massive debt, Vodafone Group reportedly intended to sell its whole $2.3 billion share in Indus Towers through block sales last week, according to Reuters story. The Reuters story also stated that Vodafone's substantial $42.17 billion net debt will be reduced with revenues from this stake sale.

To Summarize

Vodafone sold significant portion of its stake in Indus Towers, reducing its ownership to 3.1% to repay debt. sale raised ₹ 15,300 crore & involved 53.30 crore shares worth ₹ 17,065 crore. This triggered 10% stock drop & anticipated float adjustments in MSCI & FTSE indices.