Vodafone Group plans ₹3,000 crore investment in Vodafone Idea
What's the story
Vodafone Group Plc is set to invest up to ₹3,000 crore in its Indian telecom joint venture, Vodafone Idea. This decision follows the recent monetization of its stake in Indus Towers. On June 19, the company announced it had sold an 18% stake in Indus Towers for €1.7 billion (approximately ₹15,300 crore). The shares were sold within a price range of ₹315.99 to ₹325 per share.
Debt clearance
Vodafone to utilize Indus stake sale proceeds for loan repayment
Vodafone Plc plans to use a significant portion of the proceeds from the Indus Towers stake sale to repay a large part of its €1.8 billion outstanding bank borrowings secured against Indus Towers shares. The exact repayment amount, however, remains unspecified. Concurrently, Bharti Airtel is reportedly negotiating with Vodafone Plc for an additional 3% stake in Indus Towers, following their recent acquisition of a 1% stake.
Additional revenue
Potential additional funds from Bharti Airtel deal
The funds raised through these transactions are primarily intended for loan repayment, with further monetization of its Indus stake planned for reinvestment into Vodafone Idea. If the transaction with Bharti Airtel proceeds at the same price range as the previous block deal, Vodafone Plc could potentially raise an additional ₹2,500 crore. Sources told Moneycontrol that Vodafone Plc aims to invest as much as ₹3,000 crore in the telecom company, largely funded by the Indus stake sale.
Public offering
Vodafone Idea's successful public offering in April
This investment plan comes on the heels of a successful ₹18,000 crore follow-on public offering by Vodafone Idea in April. The offering saw participation from investors such as GQG Partners, Fidelity, HDFC MF, and Motilal Oswal MF among others. The funds raised in April are expected to aid Vodafone Idea in setting up its 5G network and strengthening its 4G network coverage across key geographies in India.