Vodafone UK may infuse ₹2,000 Crore equity topup to Vi

3 Jul 2024 , 11:07 AM

According to experts, Vodafone Group Plc may inject ₹2,000 Crore equity into Vodafone Idea (Vi) via the sale of its 3.1% stake in Indus Towers. This might be used to settle the Indian telco’s debt to the tower company.

Vi may make further payments to Indus to reduce its debt after the telco raises ₹23,000-25,000 Crore through term loans, as expected.

Following the recent sale of its 18% holding in Indus, UK-based Vodafone now owns 3.1% of the tower company and is thought to be in talks with Bharti Airtel about selling these shares, according to sources. Previous conversations between the two sides were stalled due to valuation disputes, but the most recent discussions may produce results, according to the persons cited above.

Ambit Capital estimated Vi’s past dues to Indus to be over ₹10,000 Crore prior to the recent ₹360 Crore payment in the March quarter of FY24. Vi generates 35-40% of the tower company’s revenue.

Airtel recently acquired 1% of Indus for ₹862 Crore, increasing its holding to 48.95% and moving closer to majority ownership.

Vodafone Group Plc sold its 18% share in Indus last month for ₹15,300 Crore in an open market deal. The stake sale revenues were mostly utilised to pay off the majority of the UK company’s existing lender obligations for euro 1.8 billion in borrowings secured against Indian assets.

According to the terms of the existing security arrangements, Indus retains a pledge over the remaining 3.1% shares held by UK-based Vodafone in the tower company, with a maximum liability of ₹4,250 Crore.

Last month, Vi dialled a State Bank of India-led banking consortium to borrow ₹23,000 Crore in debt through term loans and an additional ₹10,000 Crore in bank guarantees to support the capital investment required to compete effectively with larger rivals Reliance Jio and Airtel.

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