Mumbai, May 20, 2024 – Significant developments are anticipated for Indus Towers, India’s largest mobile tower installation company, as a major block deal is expected tomorrow, May 21. According to sources quoted by CNBC Awaaz, Foreign Institutional Investors (FIIs) are likely to sell shares worth Rs 270 crore, equivalent to 80 lakh shares, through this block deal. Kotak Securities is reported to be the deal broker.
Historical Context of Block Deals
Indus Towers has seen substantial block deals in the past. Notably, on February 1, 2014, a massive block deal involved the sale of 24.7 crore shares, representing a 9.2 percent stake in the company, valued at Rs 5,229 crore. At that time, the identities of the buyers and sellers were not disclosed.
More recently, reports from Moneycontrol on January 31 suggested that US private equity firm KKR and the Canada Pension Plan Investment Board (CPPIB) were considering exiting Indus Towers. They were reportedly planning to put their $465 million stake up for a block deal bid.
Stock Market and Trading Impact
Given the Lok Sabha elections in Maharashtra, both BSE and NSE are closed today. However, Indus Towers’ shares are expected to reflect the impact of this block deal when the markets reopen. In a special trading session on Saturday, May 18, Indus Towers’ shares closed at Rs 344.75 on BSE, up 0.09 percent, and at Rs 344.50 on NSE, up 0.01 percent.
Financial Recovery Hopes from Vodafone Idea
Indus Towers is also hopeful about recovering dues from Vodafone Idea (Vi). During the release of Q4FY24 results on May 1, a senior official stated that Indus Towers is in discussions with Vi and anticipates repayment of dues soon. Vi recently raised Rs 18,000 crore through a Follow-on Public Offer (FPO), which is expected to aid in repaying its outstanding amounts. Citi Research has estimated that Vi’s total outstanding dues to Indus Towers could be around Rs 5,700 crore.
Industry Perspectives on Tariff Hikes
In related industry news, Bharti Airtel’s Managing Director and Chief Executive, Gopal Vittal, has called for substantial tariff hikes, labeling current tariffs as “absurdly low.” Vittal suggested that multiple rounds of increases are necessary for the average revenue per user (ARPU) to reach Rs 300, up from the current Rs 200. He noted that even at Rs 300, the ARPU would still be among the lowest globally.
Conclusion
Tomorrow’s expected block deal is poised to be a significant event for Indus Towers, potentially influencing its stock performance and financial strategies. As the company navigates these developments and anticipates dues recovery from Vodafone Idea, the telecommunications industry continues to grapple with the need for tariff adjustments to ensure financial sustainability.
