Bharti Airtel Says 'Not In Any Discussion' With Vodafone Group For Indus Towers Stake

Telecom major Bharti Airtel on April 24 clarified that it is “not in any discussion” to buy Vodafone UK’s stake in Indus Towers. “The Company has no desire to raise its stake beyond what is required for financial consolidation of Indus in the Company, which shall be done as and when appropriate with compliance of applicable disclosure requirements,” said Airtel in a stock exchange filing.

“Indus is a provider of critical infrastructure services to the telecom industry and Airtel relies heavily on it. Airtel will therefore always ensure that Indus remains in robust health and financially stable,” it said.

The clarification was in response to a report earlier that said Bharti Airtel was in talks with Vodafone Group to acquire such stake in Indus Towers. “This deal would have potentially given Airtel a controlling interest in the telecom infrastructure company,” the report stated.

At present, Airtel is the biggest shareholder in Indus Towers with a 47.95% stake while Vodafone Group holds 21.05%. Public shareholding in the telecom infra company stood at 30.97%. If Bharti Airtel were to buyout Vodafone Plc’s shares, its own stake in Indus would go up to 69%.

Following the development, shares of Bharti Airtel Ltd. were trading half-a-percent higher at ₹1,347.90 apiece on the NSE. Whereas, shares of Indus Towers Ltd and Vodafone Idea Ltd fell up to 5 per cent in Wednesday’s trade

Vodafone Idea shares were recently in focus after the telecom operator’s Rs 18,000 crore follow-on public offer (FPO). An ET report earlier suggested that if Vodafone Plc sells its Indus stake to Bharti Airtel, it could infuse some of the proceeds into Vodafone Idea.

Nuvama said the chain of events expected post the Vodafone Idea FPO make for an inflection point for the telecom sector. “These events should enable telecom operators to reclaim fair share of the telecom sector value triangle—ceded over the last decade,” it said.

The brokerage said it has turned positive on on the telecom sector, and reckon a combination of tariff hikes and government support shall boost the operators’ financials and returns profiles.

While Nuvama sees Bharti Airtel Ltd as the best way to play this event in the sector, and raise its target price. It has also upped Vodafone Idea’s price target, upgrading it to ‘Hold’ rating, as it sees the company finally becoming a ‘going concern’.