Airtel to pay ₹2,388 cr for Vodafone’s 4.7% in Indus Towers

With this, Vodafone would be raising Rs3,831 crore by selling 7.1% stake in India’s largest telecom tower company. The funds will then be infused in its cash-strapped Indian joint venture, Vodafone Idea (Vi), which is desperately trying to raise money to turn around its operations and better compete in the market.

According to a pact between some affiliates of the Vodafone Group, including Euro Pacific Securities Ltd, and Airtel and its unit Nettle Infrastructure, the deal will be “executed at ₹187.88 per share basis the agreed price formula in the agreement, aggregating to ₹23,880.62 million, upon fulfilment of all conditions” as previously agreed,” the Sunil Mittal-led carrier said in a statement. Airtel currently holds a 41.7% stake in Indus.

The tower company’s shares closed 4.9% lower at ₹203.25 on the BSE Friday. Airtel’s stock ended 0.4% higher at ₹709.25, while Vi lost 0.6% to end at ₹10.11.

On February 25, Airtel said it had agreed to buy a 4.7% stake in Indus Towers from Vodafone in cash. Under the deal, the UK company must invest the proceeds in Vodafone Idea, which in turn should use the money to clear its payment arrears to the telecom tower company. On that day, Indus shares closed 4.11% higher at Rs 214.20.

A few days before the February 25 announcement, Vodafone sold 2.4% in Indus via a block deal to undisclosed investors for ₹1,443 crore, or ₹ 226.84 a share.

Back then, Airtel did not share financial terms of its stake buy but said the purchase “would be at an attractive price, representing a significant discount, typically, available for such large block transactions”. It added that the carrier was also protected with a capped price which was lower than the price for the block of Indus shares sold by Vodafone.