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Bharti Airtel rises on plan to buy Indus Towers shares, prepayment of deferred liabilities

The company has made Rs 8,815 crore part prepayment of deferred liabilities on spectrum acquired in 2015 auction.

March 28, 2022 / 10:19 AM IST
Bharti Airtel

Bharti Airtel

 
 
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Bharti Airtel share price rose on March 28 as the company is going to acquire 4.7 percent equity in Indus Towers from an affiliate of Vodafone Group Plc at Rs 187.88 per share with the transaction totalling Rs 2,388.06 crore.

Also, Bharti Airtel has entered into an agreement for buying 7.036 percent stake in Avaada KNShorapur, a special purpose vehicle for owning and operating a captive power plant.

And, Nxtra Data, a subsidiary of the company, has entered into an agreement for buying 11.334 percent stake in Avaada KNShorapur.

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In an another development, the company said that it has made Rs 8,815 crore part prepayment of deferred liabilities to the department of telecom on spectrum acquired in 2015 auction.

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The prepayment is for instalments due in FY27 and FY28.

Over the last four months, Airtel has cleared Rs 24,334 crore of its deferred spectrum liabilities much ahead of scheduled maturities, it added.

These liabilities carried an interest rate of 10 percent and have been paid off through a combination of strong free cash generated by business, equity proceeds and significantly lower cost debt of similar tenor, the company said.

Motilal Oswal

We see material upside potential on the stock from: a) incremental ARPU improvement opportunity through market share gains, tariff hikes and customer upgrades, b) growth in non-mobility businesses including value unlocking in multiple digital/enterprise segments and c) re-rating of valuation multiple backed by improving ROCE/FCF profile due to ARPU growth and higher share of non-mobility business, raising customer stickiness.

While 5G-led increase in capex intensity remains a red flag, our channel checks indicate lower spectrum pricing as well as moderate capex as a % of revenue over 3-5 years coupled with the Rs 160 bn uncalled Rights issue will ensure that FCF and net debt numbers would be well managed.

Maintain buy with a target price of Rs 910, implying 28% potential upside.

CLSA

The research firm has kept a buy rating on the stock with a target at Rs 915 per share. Also, upside is seen in enterprise and broadband.

The company can now monetise digital assets like Airtel Payments Bank and Nxtra. The non-mobile business is growing ahead of mobile, and it sees big opportunities in Airtel Black converged offering.

Jefferies

The brokerage house has maintained a buy rating on the stock with a target at Rs 860 per share. It is well positioned to grow its India mobile, home broadband and enterprise business. It has taken initiatives to boost customer experience and revamp go-to-market approach.

At 09:38 hrs Bharti Airtel was quoting at Rs 712.75, up Rs 3.50 or 0.49 percent on the BSE.

The share touched a 52-week high of Rs 781.90 and a 52-week low of Rs 490.15 on 24 November 2021 and 25 March 2021 respectively.

Currently, it is trading 8.84 percent below its 52-week high and 45.41 percent above its 52-week low.

Indus Towers was quoting at Rs 206.35, up Rs 3.10 or 1.53 percent on the BSE.

 



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Moneycontrol News
first published: Mar 28, 2022 09:58 am
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