Bharti Airtel denies reports of interest in Vodafone’s Indus Towers stake

After reports emerged that Bharti Airtel is in discussions to purchase a 21.05 per cent stake in Indus Towers from UK-based Vodafone Group, the telecom giant has come forward and denied the claims.

“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,” Airtel said in an exchange filing.

The initial report by The Economic Times, citing industry experts, had claimed that if Vodafone Plc proceeds with selling its stake in Indus to Airtel, it could inject some of the resulting funds into Vodafone Idea (Vi), its struggling telecom venture in India in partnership with the Aditya Birla Group.

As per Indus Towers’ latest filing with the BSE, Airtel holds the largest stake at 47.95 per cent, followed by Vodafone Group at 21.05 per cent, with the remaining 30.97 per cent held by the public. If Airtel were to acquire Vodafone’s stake, its ownership in Indus would rise to 69 per cent.

On Tuesday, Indus shares closed 2.9 per cent higher at Rs 359.65 on the BSE, resulting in a market capitalisation of Rs 96,923.41 crore. At this valuation, Airtel’s acquisition of the 21.05 per cent stake would cost approximately Rs 20,402.37 crore. However, Airtel is asking for a lower valuation of around Rs 12,026 crore, based on the desired share price range.

Meanwhile, Vi’s CEO Akshaya Moondra stated that the proceeds from the recently concluded Rs 18,000 crore follow-on public offer (FPO) would not be utilised to settle dues owed to any promoter or promoter group entity, hinting at Indus, the report said. He mentioned that Vi plans to settle vendor dues using cash flows from operations without specifying a timeline for clearing Indus’ dues.

Vi contributes 35-40 per cent of Indus Towers’ revenue. Ambit Capital estimates that Vi still owes Indus approximately Rs 10,000 crore. However, Vi has begun addressing its substantial dues to Indus, positively impacting the tower company’s net profit in the fiscal third quarter.

As of December-end, Indus Towers operated 211,775 towers, with Bharti Airtel and Vi as its primary customers.