Bharti Airtel may acquire additional 3% stake in Indus Towers

24 Jun 2024 , 05:30 PM

Bharti Airtel is reportedly in talks with Vodafone Plc to acquire an additional 3% stake in Indus Towers, according to CNBC TV18 sources. As of June 24, Bharti Airtel’s stock showed little movement, trading at ₹1,414.3, slightly down from the previous close.

Last week, Vodafone Group sold an 18% equity stake in Indus Towers through block deals, amounting to about ₹15,300 Crore. This sale reduced Vodafone’s stake in Indus Towers to 3.1%.

Bharti Airtel recently acquired an additional 1% stake in Indus Towers during this transaction, increasing its total holding to nearly 49%. If Bharti Airtel proceeds with the proposed acquisition, it would become the majority stakeholder with a 52% share in Indus Towers.

CNBC TV18 reported that Bharti Airtel plans to merge Indus Towers with its data center business, Nxtra. The cash flow from Indus Towers would be used to expand Nxtra, aiming to make Airtel’s telecom business more asset-light. This merger is expected to unlock value and facilitate an exit for Carlyle, which acquired a 24% stake in Nxtra in 2020.

Vodafone intends to use the proceeds from its stake sale to settle dues with Indus Towers. A recent Reuters report mentioned that Vodafone Group is looking to sell its entire $2.3 Billion stake in Indus Towers to reduce its substantial net debt of $42.17 Billion. Vodafone’s plan to offload its 28% stake in Indus Towers, announced in 2022, had seen slow progress until the recent transactions.

By consolidating its majority shareholding in Indus Towers and merging it with Nxtra, Bharti Airtel aims to strategically capitalize on Indus Towers, further solidifying its market position.