Indus Towers shares climbed 13 percent on February 6 after the government asked Vodafone to convert adjusted gross revenue (AGR) dues into equity shares and Bharti Airtel bought shares from its subsidiary in the tower company.
It was the second largest gainer in the futures & options segment, trading with 13.3 percent gains at Rs 163 on the NSE, at 15:22 hours IST.
Last Friday, the government asked telecom operator Vodafone India to convert AGR dues into equity shares, raising some hope for the mobile tower installation company to get payments from the government.
"Government of India has, in line with the Reforms and Support Package for Telecom Sector communicated earlier, directed Vodafone Idea to convert the NPV of the interest related to deferment of spectrum auction instalments and AGR dues into equity shares to be issued to the Government of India," Vodafone Idea said in its filing to the exchanges. The total amount to be converted into equity shares is Rs 16,133,18 crore.
Indus Towers has posted a consolidated loss of Rs 708.2 crore for the quarter ended December FY23, largely due to doubtful debt allowance in respect of overdue recoverable from one of the telecom operators. The company did not mention the name of the telecom operator but experts said it was Vodafone Idea.
"A large customer of the Group accounts for substantial part of net sales for December FY23 quarter and constitutes a significant part of trade receivables outstanding and unbilled revenue as of December 2022," Indus Towers said in its exchange filing on January 24.
During the quarter, the company received committed part payment till December 2022 from the telecom operator but the said telecom operator has indicated challenges in complying with the higher payment plan in future, which has resulted in additional allowance for doubtful debt of Rs 2,298.1 crore for December FY23 quarter.
Bharti Airtel has bought an additional 23.01 percent stake in Indus Towers, from its own subsidiary Nettle Infrastructure Investments, raising shareholding to 47.95 percent from 24.94 percent earlier.
This additional stake acquisition is as per the composite scheme of arrangement between Nettle Infrastructure, Telesonic Networks and Airtel for the amalgamation of Nettle and Telesonic, which has been effective from February 1, 2023. Nettle and Telesonic are subsidiaries of Airtel.
Indus Towers stock has seen a strong gap-up opening on February 6 and formed a long bullish candlestick pattern on the daily charts after recent consolidation. In fact, it started trading above the big bearish candlestick pattern formed on January 27, immediately after its quarterly earnings scorecard.
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