Bharti Airtel Denies Plans to Acquire Vodafone's Stake in Indus Towers
Responding to reports that Bharti Airtel was in talks to purchase a 21.05% stake in Indus Towers from Vodafone Group, the telecom giant has denied the claims. Airtel clarified in an exchange filing that it has no intention of increasing its stake beyond what is required for financial consolidation of Indus within the company. This consolidation will be undertaken as and when appropriate, adhering to all applicable disclosure requirements.
The initial report by The Economic Times, based on industry sources, had suggested that if Vodafone Plc proceeded with selling its stake in Indus to Airtel, it could potentially inject some of the resulting funds into Vodafone Idea (Vi), its joint venture with the Aditya Birla Group in India.
Currently, Airtel holds the largest stake in Indus Towers at 47.95%, followed by Vodafone Group at 21.05%. The remaining 30.97% is held by the public. If Airtel were to acquire Vodafone's stake, its ownership in Indus would rise to 69%.
On Tuesday, Indus shares closed 2.9% higher at Rs 359.65 on the BSE, resulting in a market capitalization of Rs 96,923.41 crore. At this valuation, Airtel's acquisition of the 21.05% stake would cost approximately Rs 20,402.37 crore. However, Airtel is seeking a lower valuation of around Rs 12,026 crore, based on the desired share price range.
Meanwhile, Vi's CEO Akshaya Moondra stated that the proceeds from the recently concluded Rs 18,000 crore follow-on public offer (FPO) would not be utilized to settle dues owed to any promoter or promoter group entity, including Indus. He mentioned that Vi plans to settle vendor dues using cash flows from operations without specifying a timeline for clearing Indus' dues.
Vi contributes 35-40% of Indus Towers' revenue. Ambit Capital estimates that Vi still owes Indus approximately Rs 10,000 crore. However, Vi has begun addressing its substantial dues to Indus, positively impacting the tower company's net profit in the fiscal third quarter.
As of December-end, Indus Towers operated 211,775 towers, with Bharti Airtel and Vi as its primary customers.