Is Vodafone about to sell its Indian tower company stake?

Is Vodafone about to sell its Indian tower company stake?

There are still a few caveats, but it looks as though giant operator Vodafone is getting closer to selling its stake in India's largest mobile tower installation company after Indian news reports suggested a Canadian pension fund is considering making an offer.

The pension fund, Caisse de depot et placement du Quebec (CDPQ), is said to be in talks with Vodafone to buy its residual 21% stake in Indus Towers.

The reports emphasise that the talks are still at an early stage, though they suggest that Vodafone's stake in Indus is valued at around 11,270 crore (more than $US1.4 billion). 

This would be quite a commitment for CDPQ as it would constitute its biggest deal to date in India, though, as India’s Economic Times points out, CDPQ has already taken big bets on toll roads and power utilities, among other sectors, in the country.

Of course Vodafone has also had talks with other potential buyers, including long-term infrastructure investors and other sovereign wealth and pension funds, but with no results so far. If Vodafone does sell its remaining stake in Indus, it would end the company’s involvement in the passive telecom infrastructure business in India.

It’s also worth mentioning that, as the largest shareholder in Indus, with about 48%, operator Bharti Airtel has the right of first refusal if Vodafone does decide to sell its stake to an external investor. Not only that, but, according to a source quoted by the Economic Times, the sale may also rely on Vodafone Idea, in which Vodafone holds a stake estimated at just over 28%, clearing its payment arrears to the tower company.

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