Vodafone Group Plc planning to invest up to Rs 3,000 cr in Vodafone Idea after Indus stake salesAfter monetising its stake in telecom tower company Indus Towers Ltd, Vodafone Group Plc is looking to invest as much as Rs 3,000 crore of equity in its Indian telecom joint venture Vodafone Idea Ltd, according to people aware of the development.
On June 19, Vodafone Group announced that it had sold an 18 percent stake in Indus Towers for €1.7 billion (Rs 15,300 crore, approximately).
Indus Towers shares were sold by Vodafone Plc in the price range of Rs 315.99 to Rs 325 per share.
The persons cited added that Vodafone Group is looking to invest as much as Rs 3,000 crore in the telco, with a large part of it coming from the Indus stake.
An email sent to Vodafone Group did not elicit a response till press time.
Vodafone Group Plc planning to invest up to Rs 3,000 cr in Vodafone Idea after Indus stake sales
After monetising its stake in telecom tower company Indus Towers Ltd, Vodafone Group Plc is looking to invest as much as Rs 3,000 crore of equity in its Indian telecom joint venture Vodafone Idea Ltd, according to people aware of the development.
On June 19, Vodafone Group announced that it had sold an 18 percent stake in Indus Towers for €1.7 billion (Rs 15,300 crore, approximately). Indus Towers shares were sold by Vodafone Plc in the price range of Rs 315.99 to Rs 325 per share.
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The company said that it will use the major portion of the proceeds to repay a large part of the €1.8 billion in outstanding bank borrowings secured against Indus Towers shares. It has not specified how much it will repay.
On Monday, CNBC TV18 reported that Bharti Airtel is in talks with Vodafone Plc to buy an additional 3 percent stake in Indus Towers. Airtel had picked up a one percent stake in Indus last week in a block deal.
According to the people cited, while the funds raised through the block deal were largely meant for repayment of loans taken against Indus shares as collateral, with further monetisation of its Indus stake, by way of the possible stake sale to Bharti Airtel, Vodafone Plc is planning to plough back a significant amount of capital into Vodafone Idea. If a transaction with Bharti Airtel is executed at the same price range as the block deal, Vodafone Group could garner a further Rs 2,500 crore.
The persons cited added that Vodafone Group is looking to invest as much as Rs 3,000 crore in the telco, with a large part of it coming from the Indus stake. Further the telecom player may also raise some amount in the form of debt to fund the investment in Vodafone Idea.
An email sent to Vodafone Group did not elicit a response till press time.
Vodafone Group’s plans to invest equity into Vodafone Idea come on the back of a successful Rs 18,000 crore follow-on public offering by the telco in April, which saw participation from investors such as GQG Partners, Fidelity, HDFC MF, and Motilal Oswal MF, among others.
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The April fundraise is expected to help Vodafone Idea to fund the setting up of its 5G network, while also strengthening its 4G network coverage across key geographies in India.
Also Read: How Vodafone Idea plans to spend its Rs 18,000 cr FPO proceeds
Last week Moneycontrol reported that persistent pressure from lenders over an outstanding loan taken around five years ago were among the key reasons why the UK's Vodafone Group sold its stake in Indus Towers.
Moneycontrol reported that matters came to a head after a group of foreign banks, led by BNP Paribas, HSBC and Bank of America among others, refused to extend the tenor of the loan and demanded full repayment. The loan had been raised against Vodafone Group’s 21.05 percent stake in Indus Towers for it to participate in Vodafone Idea’s rights issue in March 2019.
Several domestic and foreign institutional investors, including Norges Bank, Jane Street, SBI Mutual Fund, and Millennium Funds, purchased shares of telecom towers operator Indus Towers from Vodafone Group, according to data from stock exchanges and sources who spoke to Moneycontrol.
