Bharti Airtel in talks with Vodafone to buy 3% more stake in Indus Towers; may merge with data unit

Bharti Airtel plans to acquire a majority stake in Indus Towers.

Bharti Airtel is talks with Vodafone Plc to buy 3 percent additional stake in telecom towers company Indus Towers, reported CNBC TV18, citing unidentified sources. Bharti Airtel stock was little changed on June 24, trading at Rs 1,414.3 in the afternoon, marginally down from the previous close.

Earlier, last week, Vodafone group had sold an 18 percent equity stake in Indus Towers in block deals for about Rs 15,300 crore. With this, Vodafone group is now left with a 3.1 percent shareholding in Indus Towers.

Bharti Airtel had bought 1 percent additional stake in Indus Towers in the transaction, taking its holding in the towers company to  nearly 49 percent. The proposed additional stake acquisition would make Bharti Airtel the majority stakeholder in Indus Towers with a 52 percent shareholding.

Airtel plans to Indus Towers with its data centre business Nxtra, reported CNBC TV18. Further, Indus Towers cash would be used for Nxtra expansion, said the report. Airtel aims to make its telecom business asset light via Nextra and Indus Towers merger.

The merger would unlock value, and would also give exit to Carlyle from its investment. Private Equity major Carlyle had bought a 24 percent stake in Nxtra in 2020.

Consolidation of the majority shareholding in Indus Towers, and then merging it with the data centre business is apparently part of Bharti Airtel's mega plan to of two-pronged strategy to capitalise on Indus Towers.

On the other hand, Vodafone is likely to use stake sale proceeds to pay dues to Indus Towers. A recent Reuters report had said that Vodafone Group was looking to sell its entire $2.3 billion stake in Indus Towers as part of a strategic move to pare its hefty debt.

The proceeds from this stake sale are earmarked for trimming down Vodafone's significant $42.17 billion net debt, the Reuters report added. Back in 2022, Vodafone announced intentions to offload its then-28 percent stake in Indus Towers, but progress had been slow till last week.