Vodafone Plc plans Rs 3,000 crore investment in Vodafone Idea after Indus Towers sale

Vodafone Plc is set to invest up to Rs 3,000 crore in its Indian joint venture, Vodafone Idea Ltd. This decision follows the company’s recent monetisation of its stake in Indus Towers Ltd.

On June 19, Vodafone Plc announced the sale of its 18 percent stake in Indus Towers for approximately Rs 15,300 crore. The shares were sold at prices ranging from Rs 315.99 to Rs 325 per share. The company plans to use most of the proceeds to repay a significant portion of the €1.8 billion in outstanding bank borrowings secured against Indus Towers shares.

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Sources indicate that while the primary purpose of the funds raised was to repay loans, Vodafone Plc aims to reinvest a substantial amount into Vodafone Idea. This reinvestment strategy could be bolstered further if ongoing talks with Bharti Airtel to sell an additional 3 percent stake in Indus Towers are successful. This potential sale could raise an additional Rs 2,500 crore.

Bharti Airtel recently acquired a one percent stake in Indus Towers and is reportedly in discussions to increase its holding by another three percent. The proceeds from these transactions are expected to aid Vodafone Idea in strengthening its financial position.

Vodafone Plc’s planned investment comes after Vodafone Idea’s successful Rs 18,000 crore follow-on public offering (FPO) in April. This fundraise saw significant participation from major investors like GQG Partners, Fidelity, HDFC MF, and Motilal Oswal MF. The funds from the FPO are intended to support the deployment of Vodafone Idea’s 5G network and enhance its 4G network coverage across key regions in India.

Despite attempts to reach Vodafone Plc for comment, no response was received by press time.

This strategic move by Vodafone Plc highlights its commitment to bolstering Vodafone Idea’s capabilities amid competitive pressures in the Indian telecom market.