Bharti Infratel up 10% post DoT nod to Indus Tower merger; Board meet today

Shares of Bharti Infratel surged 10 per cent to Rs 248.7 on the BSE on Monday after the Department of Telecom (DoT) approved the merger of mobile tower company Indus Towers with Bharti Infratel. Besides, the Board is scheduled to meet today to decide the future course of action. READ STATEMENT HERE

At 9:48 am, the stock nearly erased its entire early morning gains and was quoting at Rs 226.75, up 0.29 per cent. In comparison, the benchmark S&P BSE Sensex was at 40,741.95, down 428 points or 1.04 per cent. Nearly 5.93 million shares have changed hands on the counter on the NSE and BSE so far till the time of writing of this report. 

Bharti Infratel and Vodafone hold 42 per cent stake each in Indus. Besides, the latter holds 11.15 per cent stake in the mobile tower firm. As per the plans, the timely completion of the tower deal would allow Bharti and Vodafone Idea in offloading stake and raising funds. 

According to the original deal structure, Vodafone was to be issued 783.1 million new shares in the merged entity in exchange for its 42 per cent stake in Indus Towers, and this could take its holding to 29.4 per cent in the new company, depending on the options finally taken by Idea and Providence.

Similarly, Bharti Airtel’s stake in the new combined tower behemoth was to be diluted to 37.2 per cent in the combined entity, from 53.5 per cent it currently holds in Bharti Infratel. The transaction at the time of the deal announcement valued Indus Towers at an enterprise value of Rs 71,500 crore. READ MORE

In the intra-day trade, Vodafone Idea zoomed 14 per cent, but pared gained later to trade 0.45 per cent lower at Rs 4.38 apiece. 

The approval comes at a time when the telecom companies stare at Rs 1.47 trillion in unpaid dues in the adjusted gross revenue (AGR) issue— Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges.

Of the estimated dues that include interest and penalty for late payments, Airtel and Vodafone Idea owe about 60 per cent. Airtel has raised $3 billion in the past few months and is expected to have sufficient funds to tide over the AGR crisis. Vodafone Idea, which has paid just 7 per cent of its total Rs 53,000-crore statutory dues, remains vulnerable.