In a filing to the London Stock Exchange, Voda plc has said that alongwith Aditya Birla Group, it intends to contribute to the issue of equity shares by Vodafone India (Vi) in their capacity as co-promoters.
Credit Suisse in a note has commented, “Voda Plc may effectively monetise only Rs 8,100 crore of its stake in Indus, which will be used for infusion of equity in Vi.
Vodafone Plc’s 28.1% Indus stake at current market price is valued at Rs 19,000 crore. Around Rs 11,000 crore has already been utilized, when it took up Vi’s Rs 25,000 crore rights issue, by pledging the Indus stake with banks in 2019.
Voda plc will now use its Rs 81 billion stake in Indus to participate in Vi’s fundraise. The effective cash flow available to Vi would be only Rs 30-40 billion, as Rs 40 billion of the equity infusion would be utilised to clear Vi’s existing overdue balance with Indus.
The application of proceeds for clearing dues with Indus is highly likely as the tower company’s board has agreed to modify its security package, which earlier included a primary charge on 190 million shares to enable Voda Plc to monetise its stake in Indus Towers.”