Indus Towers | CMP: Rs 200.20 | The scrip was down 10 percent after the company announced weak earnings. Consolidated net profit declined 66 percent YoY to Rs 477 crore in the quarter. Operating cash flow tanked 60 percent to Rs 807 crore reflecting the impact of non-payment from one of the customers. Overall total towers grew 1,027 from the previous quarter to 186,474, which was weaker than the historical average for the company. Sharing revenue per tower fell 11.4 percent sequentially to Rs 75,688 in the reported quarter.
Canadian pension fund Caisse de depot placement du Quebec (CDPQ) is likely to buy Vodafone’s residual stake in Indus Towers, The Economic Times reported on August 19 . Indus Towers is India’s largest mobile tower installation company it offers passive infrastructure services to telecom operators and other wireless services providers.
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Sources privy to the matter told ET that the stake sale process has seen some activity with both the companies holding management meetings. A formal due diligence is also expected to start soon.
Moneycontrol could not independently verify the report.
The sources also disclosed that the discussions are still preliminary in nature and there is no guarantee that they will translate into a transaction.
Spokespersons of CDPQ and Vodafone declined to comment. Indus Towers
and Airtel did not respond to ET’s queries.
Also Read: Bharti Airtel buys Vodafone’s 4.7% stake in Indus Tower for Rs 2,388 crore
Based on current market price, Vodafone’s 21% stake in Indus is valued at
around Rs 11,270 crore, based on the tower company’s Rs 53,669.67 crore market capitalisation on Thursday.
Earlier this year in February Moneycontrol reported that telecom giant Vodafone had announced the launch of a block deal to sell 2.4 percent stake in Indus Towers, India’s largest telecom tower firm.
“Vodafone Group Plc holds 757.8 million shares in Indus Towers Limited, equivalent to a 28.1% shareholding. 190.7 million of these shares, equivalent to a 7.1% shareholding, are currently pledged to Indus as part of the security arrangements entered into between Vodafone and Indus at the time of the merger of Indus Towers with Bharti Infratel,” the UK-based telco said in a disclosure to the London Stock Exchange (LSE) earlier this year.
Also Read: KKR, pension fund CPPIB eyeing exit from Indus Towers
“Vodafone announces that it has launched a placing of 63.6 million Primary Shares in Indus through an accelerated book build offering. This represents 2.4% of Indus’ outstanding share capital,” it added. Investment bank Morgan Stanley is the advisor to the deal.
The promoters of the joint venture Indus Towers, Bharti Airtel and Vodafone Group, currently hold 41.73 percent and 28.12 percent stake in the company, respectively.
“Any further share sale by Vodafone in Indus can only happen if the UK
‘company ensures its Indian JV (Vodafone Idea) will clear its payment arrears to the tower company,” a person aware of the discussions told ET.
A source privy to the matter told the Economic Times that an investor like CDPQ may only be keen on a partial stake.
Also Read: Indus Towers slumps on weak June quarter earnings
A stake sale in Indus Towers by the British Telecom giant would mean an exit for it from the passive telecom infrastructure business.
