Indus Towers has been in the news for quite some time now as Vodafone sold 18% of its stakes in the company last week. The largest mobile tower installation company in the country, Indus Towers, now may get its largest stakeholder as Bharti Airtel intends to buy another 3% of India’s largest tower company from Vodafone.
Bharti Airtel has initiated a conversation with Vodafone in which it has proposed to buy an additional three percent of shares in Indus Towers. In last week’s block deal with Vodafone, Bharti Airtel acquired a 1% share, which took Bharti Airtel’s total holding in Indus Towers to around 49%. Now if Bharti Airtel purchases another 3% of the company from Vodafone, then it would become the largest stakeholder with 52% stakes in Indus Towers. On the other hand, Vodafone’s stake came down to 3.1% after the block deal of last week. The 18% stake in Indus Towers sold by Vodafone is worth around ₹ 15300 crore.
Bharti Airtel’s Future Plans with Indus Towers
If Bharti Airtel becomes the 52% stakeholder of Indus Towers, then it has further plans to merge Nxtra, which is the high-growth data center business segment of the company with Indus Towers. It will be a win-win situation for both Indus Towers and Nxtra as the former needs cash for upcoming auctions and Nxtra can use the funds from this deal.
As per Indus Towers, the total outstanding dues of Vodafone is around ₹ 5400 crores, which the later company can pay with the proceeds from the share of shares. It also indicates that if this merger happens, then the American private equity firm, Carlyle, which is one of the biggest Indus Towers shareholders will exit Indus Towers, which holds around 24% of the equity shares since 2020.
Indus Towers Performance
In the past six months, the shares of Indus Towers have gained around 85.22% and it is currently trading around ₹ 343.25 as of 12.17 pm on 25 June 2024. The total income of the company increased to ₹ 7301.70 crore in the quarter ended on 31 March 2024, compared to ₹ 7297.90 crores in the December 2023 quarter. The profits also surged in the March 2024 quarter to ₹ 1853.40 crores from ₹ 1541.40 crores of the December 2023 quarter.
Bharti Airtel Performance
The share price of Bharti Airtel has surged by 41.56% in the past six months, and it is currently trading around ₹ 1415.35 per share. The consolidated revenues of Bharti Airtel during the March quarter of 2024 was ₹ 37599 crores, which is a rise of 4.4% on a YoY basis. The EBITDA margin on the other hand fell by 12 bps on a YoY basis to 52.1% in this quarter and the net income fell to ₹ 2952 crores in this March quarter compared to the corresponding quarter in 2023.
In India, Bharti Airtel had an exceptional March 2024 quarter when the revenues increased by 12.9% on a YoY basis. EBITDA Margin increased by 56 bps during the quarter on a YoY basis.
Wrapping up
It will be interesting to see how these telecom companies perform in the upcoming days if this merger turns into a reality. Moreover, as tariffs are expected to increase for the telecom and tower installation companies, this merger can be a win-win situation for both parties involved.
Source- https://www.livemint.com
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