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Vodafone-Idea acquires Aditya Birla Telecom to monetise stake in Indus Towers

The board of Vodafone Idea has approved (pdf) its merger with Idea parent company Aditya Birla Telecom. Aditya Birla Telecom holds an 11.15% stake in telecom tower firm Indus Towers which has now gone to Vodafone Idea, which will further sell the Indus stake to a yet undecided buyer/s. The move is subject to approval of the National Company Law Tribunal.

Vodafone Idea has a debt of over Rs 1.09 lakh crore and is looking to lessen it with this move, as well as simplify its corporate structure and function more “efficiently and economically.”

This move comes after Vodafone said that it would look at monetising its stake in Indus Towers to make additional investments in India. According to a report by ET, Vodafone Idea can raise up to Rs 5,100 crore from the sale of Aditya Birla’s 11.15% stake in Indus.

It is worth noting that Indus towers is a jointly owned by
– Idea (Aditya Birla) – 11.15%
– Vodafone- 42% and
– Bharti Airtel – 42%

The telecom tower company is in the process of merging with Bharti Infratel, a subsidiary of Bharti Airtel.

Timeline of the Vodafone – Idea merger

  • In January 2017, Vodafone confirmed that it was in talks with Idea Cellular for a merger deal.
  • In April 2017, Vodafone India announced that it would additionally sell a 9.5% stake to Aditya Birla, the promoters of Idea.
  • In July, the Vodafone–Idea merger deal received its final approval from the DoT.
  • Between July and August 2018, it got statutory approvals from SEBI NSE,  BSE, CCI (July 2017), and the National Company Law Tribune.
  • Last month, Vodafone- Idea began operations; becomes the largest telco in the country.

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