Vodafone Group sold a larger-than-planned 18% stake in Indus Towers in India for USD 1.82 billion (MYR 8.6 billion) on Wednesday. Local telecom operator, Bharti Airtel, bought shares to increase its stake to nearly 50%.
Initially, UK's Vodafone, which owns a 21.5% stake in Indus, had planned to sell only a 10% stake. However, due to strong investor demand, they ended up selling almost double the planned amount, according to a banking source who requested anonymity.
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Vodafone sold 484.7 million Indus shares at INR 310-341 per share, raising INR 153 billion, or EUR 1.7 billion, to repay debt. They have EUR 1.8 billion in bank borrowings against their Indian assets, which also includes a stake in Vodafone Idea, the third-largest telecom operator in India by subscribers.
After the sale, Indus stock initially dropped by 9.4% but later recovered to trade down 4.3% at INR 29.60 rupees around midday in Mumbai, with over 750 million shares traded, marking their busiest session ever.
Bharti Airtel, India's second-largest telecom operator, acquired an estimated 1% stake in Indus, increasing its ownership to about 49%. The price of the acquisition was not disclosed.
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Currently, Vodafone Group holds a 3.1% stake in Indus, while Vodafone Idea also has a stake in the company. Private equity firms KKR and CPPIB sold their entire stakes in Indus back in February.
Vodafone Group sold its stake through block deals, a method where investors sell shares in the market. This method has become more popular in India as the stock market reaches record-high levels. Following the sale, Vodafone Idea's shares remained mostly unchanged, while Bharti Airtel's shares were down by 1%.
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