Indus Towers sinks into death cross after tumbling over 18 per cent!

As such, a death cross is typically considered to be a bearish signal.   

Nifty and Sensex have plummeted nearly 3.5 per cent each on Thursday amid escalated geopolitical issues. Nifty slipped below its important psychological mark of 16,500 and moreover, for the first time since August 2020, the index has slipped below its 200-DMA.   

The volatility is also roaring as India VIX has jumped over 25 per cent and is trading above the 31-mark, which is the highest level since June 2020.   

Many stocks are seen breaking their important support levels; however, there is one particular stock that has literally led to the tears of blood for its shareholders as it plunged over 18 per cent on Thursday. The name of the stock is Indus Towers Limited.   

So, let's know, what has led to such a sharp fall in the stock. Vodafone Group Plc (Vodafone) holds 757.8 million shares in Indus Towers Limited, equivalent to a 28.1 per cent shareholding. Around 190.7 million of these shares, equivalent to a 7.1 per cent shareholding, are currently pledged to Indus (primary shares) as part of the security arrangements entered between Vodafone and Indus (security arrangements) at the time of the merger of Indus Towers with Bharti Infratel.  

Vodafone announces that it has launched a placing of 63.6 million primary shares in Indus through an accelerated bookbuild offering (placing). This represents 2.4 per cent of the company’s outstanding share capital. Vodafone is also in advanced discussions with one of the largest shareholders in Indus for the purchase of up to 127.1 million Indus shares from Vodafone or 4.7 per cent of its outstanding share capital, which represents the remaining balance of primary shares. The terms of such an agreement are currently being discussed and there is no certainty that the sale will proceed. If the sale is completed, Vodafone would retain 567.2 million shares in Indus or a 21.0 per cent shareholding (residual shareholding).  

In addition, Vodafone is also in discussions with several interested parties in relation to a potential sale of the residual shareholding. 

Technically, the stock has also witnessed a ‘death cross’, which is a negative crossover of short-term moving average (50-DMA) to a long-term moving average (200-DMA). As such, a death cross is typically considered to be a bearish signal.