US private equity firm Providence reportedly aims sell a 5% indirect stake in India’s Indus Towers by offloading its shares in Idea Cellular’s Aditya Birla Telecom.
Providence is working with Idea to explore options for the Indus stake, including an…
US private equity firm Providence reportedly aims sell a 5% indirect stake in India’s Indus Towers by offloading its shares in Idea Cellular’s Aditya Birla Telecom.
Providence is working with Idea to explore options for the Indus stake, including an IPO or direct sale, reports the Economic Times.
The US firm has reportedly asked bankers for informal valuations of Indus, a joint venture between Bharti Airtel, Vodafone India and Idea’s Aditya.
One investment banker was quoted saying an IPO is out of the question as Bharti and Vodafone, which both have 42% stake in Indus, are not interested. A sale of Providence’s shares to Bharti, Vodafone or Idea would “skew the equilibrium” of the shareholding structure, the banker reportedly said.
Another investment banker was cited saying Idea, which is 20%-owned by Malaysia’s Axiata, or an associated entity could be a potential buyer.
Providence has a 16% holding in Aditya, which in turn owns 16% of Indus. The PE firm also has a small stake in Idea, bringing its total holding in Indus to about 5%.
The divestment of Providence’s Indus shares could prove difficult as investments in the towerco can also be made via publically-traded Infratel, people familiar with the matter were cited saying.
Indus has an enterprise value of US$12.5-13bn, a Mumbai-based analyst was quoted saying. This would value a 5% stake at up to US$650m.
Providence, Idea, Airtel and Vodafone have declined to comment on the matter. Indus and Aditya were not immediately available.
Last September, Reuters reported that Providence aimed to raise US$242m from the sale of a 2.4% stake in Idea, citing a source involved in the deal. Idea is India’s third-largest mobile operator and amassed the most spectrum at the country’s most recent auction, agreeing to pay Rs303.1bn.
Meanwhile, KKR confirmed today that it has sold its entire 2.5% stake in Infratel. The value was not disclosed, but it has been estimated at about Rs17bn (US$272m).
