Bharti Airtel share price rises as subsidiary sells tower biz, Motilal Oswal maintains 'buy'

Broking firm Motilal Oswal has kept buy rating with a price target of Rs 720.

March 24, 2021 / 10:13 AM IST
At 09:19 hrs, Bharti Airtel was quoting at Rs 532.45, up Rs 3.25, or 0.61 percent on the BSE.

At 09:19 hrs, Bharti Airtel was quoting at Rs 532.45, up Rs 3.25, or 0.61 percent on the BSE.

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Bharti Airtel share price rose in the early trade on March 24 after company's subsidiary had signed agreements to sell its telecommunications tower business.

Airtel Africa signed agreements to sell its telecommunications tower companies in Madagascar and Malawi to Helios Towers plc, as per the company's press release.

The group’s tower portfolios in these two markets together comprise 1,229 towers which form part of the Group’s wireless telecommunications infrastructure network.

The transactions, comprising two separate agreements, one in respect of each jurisdiction, are subject to customary closing conditions including required regulatory approvals and are not inter-conditional on each other. The Transactions are expected to close in or around calendar Q4 2021.

The aggregate gross consideration for the Transactions is expected to be approximately $108m.


In addition, Airtel Africa has entered into exclusive Memorandum of Understanding agreements for the potential sale of its tower assets in Chad and Gabon to Helios Towers plc, it added.

In an another announcement, company said it will acquire an additional 3.3 percent stake in special purpose vehicle Avaada MHBuldhana that has been formed for owning and operating a captive power plant, reported PTI.

The Sunil Bharti Mittal-led firm has earlier acquired 5.2 percent stake in Avaada MHBuldhana for Rs 4.55 crore in an all-cash deal.

Motilal Oswal | Rating: Buy | Target: Rs 720

Both of these decisions are in line with the management's intention to achieve strategic asset monetization.

Proceeds from these transactions would be utilized for debt reduction and as investments in network and sales infrastructure.

We value company on an SOTP basis. We assign 10x EV/EBITDA to the India business and 6x to the Africa business in FY23E to reach Rs 720/share. Our higher multiple captures the opportunity for an EBITDA increase from a potential price hike or market share gains.

Morgan Stanley | Rating: Overweight | Target: Rs 760

Airtel Africa entered tower sale agreement for Madagascar & Malawi assets for USD 108 million. Airtel Africa signed MoU for potential sale of over 1,000 towers in Chad & Gabon. The proceeds from strategic divestment to be used to reduce debt, reported CNBC-TV18.


At 09:19 hrs, Bharti Airtel was quoting at Rs 532.45, up Rs 3.25, or 0.61 percent on the BSE.

The share touched a 52-week high of Rs 623.00 and a 52-week low of Rs 394.05 on 04 February, 2021 and 19 October, 2020, respectively.

Currently, it is trading 14.53 percent below its 52-week high and 35.12 percent above its 52-week low.
Moneycontrol News
first published: Mar 24, 2021 09:35 am

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