British telecom giant Vodafone Plc is in discussions to sell around five per cent stake in telecom infrastructure company Indus Towers Ltd to Bharti Airtel, according to industry sources.
Vodafone Plc is also planning to sell 2.4 per cent stake worth Rs 1,490 crore in Indus Towers through a block deal on Thursday, banking sources said.
The block deal would be executed through Euro Pacific Securities, a Vodafone group entity that holds 7.59 per cent stake in Indus Towers.
The banking sources said in the block deal, the shares are expected to be offloaded in a price range of Rs 227-231 apiece.
When contacted, Vodafone refused to comment on the matter. An e-mail sent to Bharti Airtel did not elicit a response.
The industry sources said Vodafone is in talks to sell about five per cent of its stake in Indus Towers valued at over Rs 3,300 crore to Bharti Airtel. The proceeds will be pumped into the Indian entity, Vodafone Idea Ltd, they added.
Currently, Vodafone holds about 28 per cent in Indus Towers while that of Bharti Airtel is close to 42 per cent.
Indus Towers, formerly Bharti Infratel Ltd, is a leading provider of passive telecom infrastructure. It deploys, owns and manages telecom towers and communication structures for various mobile operators.
The company’s portfolio of over 1,84,748 telecom towers, makes it one of the largest tower infrastructure providers in the country with presence in all 22 telecom circles. Indus Towers caters to all wireless telecommunication service providers in India.
Indus Towers posted about 16 per cent rise in consolidated profit at Rs 1,570.8 crore in the three months ended December 2021 while revenues stood at Rs 6,927 crore during the same period.
“Our steady operational and financial performance during the quarter was reassuring. We believe that our focus to promote passive infrastructure sharing and capitalise on adjacencies will help us further strengthen our commitment of Putting India First through connecting lives,” its MD and CEO Bimal Dayal had said after announcing December quarter earnings.
Indus Tower merged with Bharti Infratel in November 2020. The company’s total mobile tower base increased to 1,84,748 from 1,75,510 on a year-on-year basis.
It may be recalled that the telecom service providers got a shot in the arm with the government, last year, approving a blockbuster relief package that included a four-year break for companies from paying statutory dues, permission to share scarce airwaves, change in the definition of revenue on which levies are paid and 100 per cent foreign investment through the automatic route.
The government also gave telcos the option to convert the interest amount pertaining to the moratorium period into equity.
Subsequently, debt-ridden Vodafone Idea Ltd opted to pay interest of around Rs 16,000 crore through preferential shares. This will result in the government holding 35.8 per cent stake in the company.
Last month, the company reported widening of its consolidated loss to Rs 7,230.9 crore while consolidated revenue from operations declined to Rs 9,717.3 crore in the third quarter ended December 2021.
Vodafone Idea’s total gross debt, excluding lease liabilities and including interest accrued but not due, as of December 31, 2021 stood at Rs 1,98,980 crore. The amount comprised deferred spectrum payment obligations of Rs 1,11,300 crore, AGR liability of Rs 64,620 crore that are due to the government and debt from banks and financial institutions of Rs 23,060 crore.
Shares of Indus Towers closed at Rs 251.2 apiece, down 0.36 per cent on the BSE.