India's Airtel in Talks to Buy Vodafone UK's Stake in Indus Towers

According to two people with knowledge of the situation, Bharti Airtel Services is in negotiations to purchase the 21.05% stake that UK-based Vodafone Group has in Indus Towers. This may give India's second-ranked telecom company a controlling interest. Industry experts stated that Vodafone Plc would inject some of the revenues from the sale of its Indus interest to Airtel into Vodafone Idea (Vi), its cash-strapped local telecom venture with the Aditya Birla Group .

Talks have stalled, meanwhile, because Vodafone's shareholding cannot be purchased by Sunil Mittal's Airtel at the current Indus share price, which has increased by more than 77% since January. Instead, Airtel is requesting a valuation between Rs 210 and Rs 212 per share, which is the price at which US private equity firm KKR and Canadian pension fund CPPIB sold their Indus stock in February 2024.

Indus has 47.95% of its equity held by Airtel, 21.05% by Vodafone Group, and 30.97% by the general public, as per the tower company's most recent BSE filing. Airtel will retain 69% of the shares following a takeover of the Vodafone portion.

On Tuesday, Indus shares closed 2.9% higher at Rs 359.65 on the BSE, valuing the company at Rs 96,923.41 crore. At current prices, Airtel will have to pay Rs 20,402.37 crore for the 21.05% stake; at Rs 210–212 a share, the deal would be valued at approximately Rs 12,026 crore.

Since Vodafone Idea Limited , a major client, has not yet closed its entire fundraising campaign and has not yet disclosed any firm plans regarding the settlement of its enormous backlog of past dues (to Indus), Airtel is likely to press Vodafone Plc for a steep discount (to Indus' current share price).

Akshaya Moondra, the chief executive of Vi, recently stated that the telco would not use the money from its recently closed Rs 18,000 crore follow-on public offer (FPO) to settle any outstanding debt owed to any promoter or promoter group company, referring Indus. According to him, it anticipates using operating cash flows to settle vendor obligations. Additionally, he provided no deadline for paying the Indus debts.