Vodafone sells 18% stake in Indus to raise $1.8 billion

Subsidiaries of UK’s Vodafone Group Plc have sold a combined 18% stake in Indus Towers Ltd to raise about $2 billion, the telecom firm said in a statement.

Vodafone subsidiaries sold 484.7 million shares through an accelerated book-build offering for ₹153 billion (about €1.7 billion, or about $1.83 billion), the company said.

The gross proceeds will be tapped to repay Vodafone’s existing lenders in relation to the outstanding bank borrowings of €1.8 billion secured against Vodafone’s Indian assets, the company said.

Following the transactions, Vodafone still holds 82.5 million shares in Indus, equivalent to a 3.1% stake.

The stake sale is among the biggest in India this year as in March British American Tobacco (BAT), the biggest shareholder in ITC Ltd, sold a 3.5% stake in the Indian conglomerate for about ₹17,500 crore (about $2.1 billion).

Meanwhile, Bharti Airtel Ltd told the exchanges on Wednesday that it bought about 26.95 million shares, or a 1% stake, in Indus from Vodafone.

Airtel earlier held a 47.95% stake in Indus.

Private equity firms I Squared Capital and Stonepeak were among the other interested buyers in Vodafone’s stake in Indus Towers.

The block deal led to shares of Indus Towers declining by 10% in intraday trading to ₹311.40 on NSE on Wednesday before regaining losses to trade at ₹334.6 apiece at 1.25pm.

Shares of Bharti Airtel were down 1.37% from the previous day’s close and were trading at ₹1,408.85, while those of Vodafone Idea were trading up 2.31% from the previous session’s close at ₹17.24.

The broader indices both Sensex and Nifty were little changed from the previous day’s close at 1.30pm.

The divestment of its stake in Indus follows Vodafone’s bid to streamline its portfolio. Chief executive officer Margherita Della Valle, who took charge last year, has been pulling out of underperforming markets.