Vodafone exits Indus Towers with sale of remaining 3% stake

The remaining 3% of Indus Towers will be sold, according to a statement released by Vodafone Group Plc (Vodafone) of the UK on Wednesday, 4 December. According to the statement, the company has initiated an expedited book-building offering to place its remaining 79.2 million shares in Indus Towers Limited (Indus), which accounts for 3% of Indus's total share capital. With the sale of its shares, Vodafone has fully left the telecom infrastructure business Indus. 

Vodafone Group stated that the proceeds from the placing will first be used to repay Vodafone's outstanding borrowings of approximately USD 101 million to its existing lenders, secured against its Indian assets.

Vodafone's exit from Indus Towers

This move follows the resignation of executives from the UK's Vodafone Group PLC, who served as non-executive directors on the board of Indus Towers, after Bharti Airtel increased its stake to over 50 percent in the tower company. Following the buyback exercise, Airtel's shareholding in Indus Towers, a joint venture company, rose to approximately 50.005 percent, making Indus Towers a subsidiary of Bharti Airtel.

Following a share buyback by the telecom infrastructure company, Bharti Airtel has been given permission by the Competition Commission of India (CCI) to enhance its ownership of Indus Towers Limited.

After the telecom infrastructure company's ongoing Rs 2,640 crore share buyback plan was completed, Bharti Airtel declared in August that it will own more than 50% of Indus Towers. Since Airtel now owns more than half of the company, it will have a controlling stake in Indus Towers and will be considered a subsidiary. 

Both former CEO Sunil Sood and former Vodafone Idea Managing Director and CEO Ravinder Takkar have resigned from their positions on the Indus Towers board. Additionally, a notification issued by Indus Towers, states that Thomas Reisten, a former executive of Vodafone PLC, has also submitted his resignation.

"The said resignations are in accordance with the provisions of the Company’s Articles of Association, following the cessation of the Board Appointment Rights of the Vodafone Shareholders in the Company," Indus Towers said in its filing.

In accordance with the conditions of the security agreements between Vodafone and Indus, Indus is entitled to security over the remaining putting proceeds in order to ensure that Vodafone Idea Limited (Vi) fulfils its commitments to Indus under the Master Services Agreements (MSAs).

Once its board reviews the terms, Vodafone intends to use the remaining funds from loan repayment towards a possible capital raise by Vi. Vi will use the money raised from this capital offering to pay Indus its MSA debt.

If any Indus shares are left over after Vodafone's outstanding debts are paid off, Indus will be allowed to use those shares and any money that isn't utilised by Vodafone to buy more Vi shares to secure Vi's commitments under the MSAs. Vodafone said that if more information is needed, it will be announced.

Vodafone's gradual Indus Towers disposal is now complete. Vodafone reduced its ownership of Indus Towers to 3% in June 2024 when it sold an 18% stake for Rs 15,300 crore.