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Vodafone Nears Sale of Stake in Indus Towers Amid Strong Investor Interest

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UK-based telecom giant Vodafone is poised to divest its 21.5% stake in Indus Towers, according to undisclosed sources cited by Reuters. The company plans to execute the sale through block deals, involving transactions of at least 500,000 shares valued at a minimum of INR100 million ($1.2 million) per trading window.

Block trades are tailored for institutional investors, enabling the sale of substantial share quantities without significant price fluctuations. Bidders must adhere closely to a specified block reference price, ensuring bids do not deviate by more than 1% above or below.

Although Vodafone has not finalized the exact size of the stake to be sold, sources suggest it may be less than the full 21.5% if demand falls short. However, preliminary interest appears robust, with private equity firm I Squared Capital and investment firm Stonepeak reportedly in advanced discussions to acquire the stake.

The potential sale comes amid Indus Towers’ expanding footprint in India, now boasting nearly 220,000 sites nationwide. This growth underscores the rising demand for mobile data services, including advancements in 5G technology.

Market analysts estimate that a complete divestment of Vodafone’s stake could yield approximately $2.3 billion based on current market conditions. This figure marks a significant increase from previous potential deals, such as the speculated $1.3 billion agreement with Canadian pension fund Caisse de dépôt et placement du Québec in 2022, which did not materialize.

Proceeds from the stake sale are expected to aid Vodafone in reducing its substantial net debt, which stands at $42.2 billion. Furthermore, the funds could potentially assist Vodafone Idea (Vi), its troubled Indian subsidiary, in settling debts owed to Indus Towers, estimated at around INR100 billion ($1.2 billion).

Vodafone’s move to divest its Indus stake follows similar actions by other investors this year, including KKR and the Canada Pension Plan Investment Board (CPPIB), who collectively raised $475.6 million through their own block deals.

The telecom industry remains attentive to developments surrounding Vodafone’s stake sale, as stakeholders await further announcements regarding the transaction’s progression and its impact on the sector.

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