Bharti Airtel in talks to buy 3% more stake in Indus Towers from Vodafone

If this sale is successful, Bharti Airtel will become the majority stakeholder in Indus Towers with a 52% shareholding

Bharti Airtel is in discussions with Vodafone Plc to acquire an additional 3 per cent stake in telecom towers company Indus Towers, according to sources cited by CNBC TV18. This move follows Vodafone's recent sale of an 18 per cent equity stake in Indus Towers in block deals worth approximately Rs 15,300 crore.

If the proposed acquisition of the additional 3 per cent stake is successful, Bharti Airtel will become the majority stakeholder in Indus Towers with a 52 per cent shareholding. Meanwhile, after this sale, Vodafone will retain a 3.1 per cent shareholding in Indus Towers.

Last week, Bharti Airtel increased its stake in Indus Towers by 1 per cent, bringing its total holding to nearly 49 per cent.

According to CNBC TV18, Bharti Airtel plans to merge Indus Towers with its data centre business, Nxtra. The cash generated from Indus Towers would be utilised for the expansion of Nxtra. This merger aims to make Airtel's telecom business more asset-light and unlock significant value, while also providing an exit for Carlyle from its investment. Carlyle, a private equity firm, acquired a 24 per cent stake in Nxtra in 2020.

The consolidation of a majority shareholding in Indus Towers and its subsequent merger with Nxtra is part of Bharti Airtel's broader strategy to capitalise on the value of Indus Towers.

Meanwhile, Vodafone intends to use the proceeds from the stake sale to settle its dues to Indus Towers. A Reuters report highlighted that Vodafone Group is considering selling its entire $2.3 billion stake in Indus Towers to reduce its substantial $42.17 billion net debt. Although Vodafone announced plans to offload its then-28 per cent stake in Indus Towers back in 2022, significant progress had been slow until the recent sale.

According to the Telecom Regulatory Authority of India's (Trai) monthly subscriber report, the total telecom subscriber base increased by 0.16 per cent to 1,201.22 million at the end of April from 1,199.28 million in March 2024. Reliance Jio leads in terms of new additions and total customer base, followed by Bharti Airtel, which added 752,000 customers, growing its subscriber base to 267.57 million in April 2024.

Bharti Airtel's stock saw little change on June 24, trading at Rs 1,419 around 2 pm, marginally up from the previous close.