News

Published: June 19, 2024
Updated: June 19, 2024

Indus Towers Stake Sale by Vodafone to Attract $110 Million in Passive Inflows

Significant Block Deal by Vodafone

Vodafone Group PLC's decision to sell up to 9.94% stake in Indus Towers Ltd through a block deal is expected to bring about $110 million in passive inflows to Indus Towers over the coming sessions, according to a recent note from Nuvama Institutional Equities. The deal, set to take place today, has a price range of Rs 310-341 per share, reflecting up to a 10% discount to the current market price. At the higher end of this price range, Vodafone could potentially raise approximately Rs 9,140 crore ($1.1 billion).

Stake and Market Impact

As of the March quarter, Vodafone held a 21.05% stake in Indus Towers, India's largest mobile tower installation company. Abhilash Pagaria of Nuvama Institutional Equities noted that due to the substantial size of this stake sale, adjustments in passive indices are expected shortly.

Passive Inflows from Indices

Pagaria estimates that passive inflows from the MSCI index will be around $70 million. Meanwhile, for FTSE indices, he anticipates inflows of approximately $36 million, which translates to 8.6 million shares, representing a half-day trading impact.

Comparison with Previous Transactions

This block deal is poised to be the second-largest in India this year, following the significant ITC transaction earlier. In March, British American Tobacco Plc (BAT) sold a 3.5% stake in ITC through an open market transaction, raising Rs 17,485 crore.

Vodafone's strategic stake sale in Indus Towers is a notable event in the market, with substantial passive inflows expected to follow. The adjustment in passive indices and the significant funds raised highlight the magnitude of this transaction, marking a pivotal moment for both Vodafone and Indus Towers.