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Bharti Airtel buys Vodafone's 4.7% stake in Indus Tower for Rs 2,388 crore

The firm acquired 4.7% stake in Indus Towers at Rs 187.88 a share, it said in a notice to exchanges. This deal was on the condition that funds will be used by Vodafone, as fresh equity in Vodafone Idea and simultaneously remitted to Indus to clear VIdea’s outstanding dues.

March 29, 2022 / 11:14 AM IST
 
 
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Bharti Airtel Ltd on March 29 said it, along with its unit Nettle Infrastructure Investments Ltd, bought 12.71 crore shares of Indus Towers Ltd from Euro Pacific Securities Ltd, an affiliate of UK’s Vodafone Group Plc for Rs 2,388.05 crore.

The firm acquired a 4.7 percent stake in Indus Towers at Rs 187.88 a share, it told exchanges.  This deal was on the condition that funds be used by Vodafone as fresh equity in Vodafone Idea and simultaneously remitted to Indus to clear outstanding dues.

Formerly Bharti Infratel, Indus Towers is one of the largest tower infrastructure provider in the country that owns and manages telecom towers as well as communication structures for mobile operators.

Recently, Bharti Airtel has prepaid Rs 8,815 crore of the spectrum dues to cut down on interest expenses. This was the second such prepayment by Airtel in the last three months.

Over the last four months, Airtel has cleared Rs 24,334 crore of its deferred spectrum liabilities ahead of scheduled maturities. These liabilities carried an interest rate of 10 percent, Airtel said.

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With this payment, Airtel has balance spectrum dues of around Rs 67,000 crore and adjusted gross revenue dues of Rs 25000 crore.

In February, the Vodafone Group (Vodafone) raised around Rs 1,442 crore by selling a 2.4 percent stake in Indus Towers via a block deal to an unnamed investor.

Earlier in March, Vodafone Idea  approved raising Rs 4,500 crore via issuing shares to its promoters Vodafone Inc and Aditya Birla group entities on a preferential basis. The board approved raising Rs 10,000 crore through issuing NCD, warrants etc.

Bharti gained revenue market share (50bps) in the third quarter of FY22 (AGR+NLD revenues, per TRAI) at the expense of Vodafone Idea, which lost share (50bps).

Bharti and Jio continued to witness sharp improvement in network speeds in 3QFY22 after the rollout of spectrum acquired in March of last year, per OpenSignal data.

Bharti’s and Jio’s network advantage on availability and coverage is likely to continue, given relative capex capacity, and keep them gaining share from Vi, analysts said.

"We believe consistent share gains from superior network quality, improving ARPU from implicit tariff hikes & 4G upgrades and impressive digital metrics should drive a re-rating. INDUSTOW remains an attractive dividend play with an c.8 percent div. yield. With the overhang of IDEA’s potential collapse behind and faster resolution of receivables from IDEA, we see upside risk from potential 5G rollouts next year", said JP Morgan in a note to its investors.

At 11am, Bharti Airtel was trading 2 percent up at Rs 749 on BSE, Indus Tower Ltd gained 1 percent to Rs 211 and  Vodafone Idea Ltd advanced 0.4 percent to Rs 10.

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Disclosure: MoneyControl is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.



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Ravindra Sonavane
first published: Mar 29, 2022 11:14 am
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