‘Not In Any Discussion’ Regarding Indus Towers Stake, Bharti Airtel Says With Vodafone Group

Major telecom operator Bharti Airtel made it clear on April 24 that purchasing Vodafone UK’s interest in Indus Towers is “not in any discussion.” “In a stock exchange filing, Airtel stated that it has no intention of increasing its stake beyond what is necessary for Indus’ financial consolidation within the company. This will be done as and when appropriate in accordance with applicable disclosure requirements.”

Airtel is primarily dependent on Indus to provide vital infrastructure services to the telecommunications sector. Thus, Airtel will always make sure that Indus maintains good health and financial stability,” the statement said.

The statement came in reaction to an earlier story claiming that Bharti Airtel and Vodafone Group were in negotiations to buy a similar share in Indus Towers. According to the article, “this deal would have potentially given Airtel a controlling interest in the telecom infrastructure company.”

With a 47.95% ownership stake, Airtel now has the largest holding in Indus Towers, followed by Vodafone Group with 21.05%. The telecom infrastructure company’s public equity was 30.97%. Bharti Airtel would control a 69% part in Indus if it were to acquire Vodafone Plc’s shares.

In response to the event, Bharti Airtel Ltd. shares were trading on the NSE at ₹1,347.90, up 0.5 percent. Conversely, in Wednesday’s trading, shares of Vodafone Idea Ltd. and Indus Towers Ltd. dropped as much as 5%.

Following the telecom operator’s Rs 18,000 crore follow-on public offer (FPO), Vodafone Idea shares have lately been the subject of attention. Vodafone Plc may inject part of the revenues into Vodafone Idea if it sells Bharti Airtel its Indus holding, according to an earlier ET article.

According to Nuvama, the sequence of events anticipated after the Vodafone Idea FPO represents a turning point for the telecom industry. It said, “These developments should allow telecom operators to recover their fair portion of the telecom sector value triangle, which they have lost over the past ten years.”

The brokerage said that it has become more optimistic about the telecom industry and believes that a combination of higher tariffs and government assistance would improve the financial standing and return profiles of the operators.

However, Bharti Airtel Ltd. is seen by Nuvama as the ideal approach to take advantage of this development in the industry and increase its target price. Additionally, it increased Vodafone Idea’s price target and upgraded the company’s rating to “Hold,” perceiving that it is now a “going concern.”