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Indus Towers introduced on Thursday that it launched a 3% pledge of shares by Vodafone Promoters; What buyers ought to know
Indus Towers block deal
Shares of Indus Towers surged almost 5% in early commerce on Thursday, extending good points for the third consecutive session, after Vodafone Plc, a UK-based telecom operator and promoter of Vodafone Idea (Vi), introduced plans to promote its remaining stake within the cellular tower firm. Vodafone Idea’s inventory additionally noticed an uptick, rising over 4% in early commerce, following a 4.2% achieve within the earlier session. However, round 10 am, Vodafone Idea shares dropped 2.2% on Thursday to Rs 8.22 on BSE after finishing its exit from Indus Towers via a Rs 2,800 crore block deal.
Indus Towers shares climbed 4.8% to Rs 376, pushing its market capitalization previous Rs 95,900 crore. Similarly, Bharti Airtel rose over 1%, reaching Rs 1,602.45 in early commerce on the BSE. Meanwhile, India’s benchmark indices, the Sensex and Nifty, edged increased on the open, each gaining 0.2%.
The events concerned within the transaction weren’t disclosed, however the deal comes simply someday after UK-based Vodafone Group Plc introduced it will promote its remaining 3% stake in Indus Towers, marking its full exit from the Indian tower firm. The sale is anticipated to be performed via an accelerated guide construct providing, with the proceeds primarily geared toward repaying debt.
Vodafone’s choice to divest its stake in Indus Towers stems from mounting stress from lenders to repay loans secured towards its Indian property. A gaggle of international banks, together with BNP Paribas, HSBC, and Bank of America, had demanded the complete compensation of borrowings initially raised to assist Vodafone Idea’s rights difficulty. This left Vodafone with restricted choices, finally resulting in the sale of its holdings in Indus Towers.
This transaction marks the ultimate section of Vodafone’s exit from Indus Towers. In June 2024, Vodafone bought an 18% stake within the firm, elevating Rs 15,300 crore. The proceeds had been largely used to pay down excellent loans secured towards Vodafone’s Indian property. Following that sale, Vodafone’s stake in Indus Towers was decreased to three%, setting the stage for right this moment’s ultimate divestment via a block deal. Bharti Airtel, the opposite promoter of Indus Towers, holds a 50% stake within the firm, making it the biggest shareholder. Airtel had beforehand elevated its stake throughout Vodafone’s earlier sell-offs.
Proceeds from the block deal are anticipated to be primarily used to repay $101 million in borrowings secured towards Vodafone’s Indian property. The remaining funds, estimated at Rs 1,900-2,000 crore, are more likely to be injected as fairness into Vodafone Idea Ltd (Vi), in response to brokerage agency Citi. This infusion would assist Vi settle its excellent dues to Indus Towers beneath their Master Services Agreements (MSAs).
Citi maintains a ‘purchase’ ranking on Indus Towers shares, with a goal value of Rs 458. The brokerage believes that the residual funds from Vodafone’s exit might translate into extra payouts of Rs 7 per share for shareholders. Citi additionally forecasts Indus Towers might pay dividends of Rs 11-12 per share for H2 FY25, with payouts rising to over Rs 20 per share yearly in FY26 and FY27, yielding a compelling dividend of 6% at present ranges.
Today’s block deal doubtless represents the ultimate section of Vodafone’s multi-year technique to scale back its publicity to the Indian telecom market and streamline its international monetary commitments. Kotak Mahindra Bank and Bank of America are reportedly performing as brokers for the share sale.
