Airtel Mulls Additional 3% Stake in Indus Towers, Vodafone Eyes Stake Reduction

Bharti Airtel Ltd. is looking to raise its stake in Indus Towers Ltd. by at least 3% as Vodafone Plc. looks to pare stake in the tower giant. Vodafone may also plough back some of the stake sale proceeds in Vodafone Idea Ltd., giving a boost to the cash strapped telecom company, according to people familiar with the matter.

The U.K.-based telecom company had reduced its investment in Vodafone Idea to nil in May 2023.

Emailed queries sent to Vodafone remained unanswered.

While no single shareholder has controlling stake in Indus Towers, Bharti Airtel is the single largest shareholder with 47.95% stake as on March 2024.

"The company has no desire to raise its stake beyond what is required for financial consolidation of Indus in the company, which shall be done as and when appropriate with compliance of applicable disclosure requirements," it said in an exchange filing.

Vodafone holds 17.98% stake in the tower giant valued at Rs 17,431.55 crore based on last closing price.

For 3% stake, Bharti Airtel will have to shell out over Rs 2,900 crore at the current valuation. Shares of Indus Towers have rallied nearly 24% in the last one month and are up nearly 2% in the last five sessions.

Infusion of sale proceeds in Vodafone Idea by the UK based parent will be a sign of regaining confidence in the turnaround of the company. Vodafone Idea has been struggling with ballooning debt but has successfully completed its equity raise.

Vodafone Idea has already raised Rs 20,000 crore from the follow on public offer and infusion of capital by promoter Aditya Birla Group.

The FPO issue was subscribed 6.36 times with qualified institutional buyers leading with subscription of 17.56 times.

The Aditya Birla Group's telecom arm had mopped up close to Rs 5,400 crore from anchor investors. Marquee investors include GQG Partners, Fidelity Investments, Australian Super, UBS Fund Management and Redwheel Fund. The telecom major allotted 490.9 crore shares at Rs 11 apiece to 74 anchor investors.

After the equity fundraise, Vodafone Idea is likely to witness an overall dilution of 26%, according to calculations by NDTV Profit.