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Bharti Infratel plans to acquire Indus Towers

The deal, when completed, is expected to create India's largest mobile tower company

Surajeet Das Gupta & Agencies  |  New Delhi 

Bharti Infratel

Bharti Infratel, a subsidiary of Sunil Mittal-led Bharti Airtel, will explore acquiring an additional stake in Indus Towers, the company said on Monday. The deal, when completed, is expected to create India's largest mobile tower company. “The board of directors of Ltd, in its meeting held on October 30, has decided to explore and evaluate the acquisition of a stake in one or more tranches in Ltd with the aim of making it a subsidiary or wholly owned subsidiary of Ltd,” the company said in a statement. For the transaction to happen, Bharti, which already has a 42 per cent stake in Indus, will have to buy shares from its three partners — Vodafone, Idea Cellular, and Providence Equity. The move comes at a time when its two joint venture partners in — Vodafone and Idea Cellular — are in the process of merging their mobile business and also exploring options to exit the tower business. However, according to analysts, the deal is expected to be in two stages – will buy a majority or 100 per cent stake in for anything around $5 billion (the company is valued at $10-11 billion). In the second stage, KKR, which holds 10 per cent in Bharti Infratel, will increase its stake as one of the largest shareholders. It is in talks with a consortium which includes Canada Pension Plan Investment Board and GIC of Singapore, among others, who will together take a substantial stake in has been looking at monetising its holdings in the tower company in order to fund its mobile telephony expansion as it wages a tough battle with Mukesh Ambani-led Reliance Jio. If the proposed deal fructifies, the combined mobile tower company will be about two and a half times the size of its nearest rivals, Bharat Sanchar Nigam Ltd, with 66,000 towers, and American Tower Corporation, which controls about 60,000 towers.

Indus had 1,23,073 mobile towers, and owned 39,264 towers on a standalone basis at the end of September. Both the jointly command a 40.8 per cent market share in terms of installed mobile tower base in the country. graph The three largest customers of and Indus are (together with Bharti Hexacom), Vodafone India and Idea Cellular. reported revenue of Rs 3,648 crore in the July-September quarter. It included contribution of Rs 1,990 crore from The share of revenue implies that the corresponding figure for during the reported quarter was around Rs 4,700 crore. Shares of closed at Rs 429.9 a unit, up by 2.52 per cent compared to the previous close, on the BSE on Monday. Complete acquisition of will give command to negotiate on rentals for putting mobile base stations on its towers when operators are looking to expand their network coverage, especially for providing high speed data services. As per statement of Bharti Enterprise Vice Chairman Akhil Gupta last month, operators in the country are expected to invest $20 billion (around 1.3 lakh crore) in the next two years and half of it will be made on infrastructure.

First Published: Tue, October 31 2017. 03:14 IST