Airtel Targets Majority Control in Indus Towers with Vodafone Stake Buy; Plans Nxtra Merger

Bharti Airtel is negotiating with Vodafone Plc to acquire an additional 3% stake in Indus Towers, India’s top mobile tower company, according to sources cited by CNBC-TV18. If the deal proceeds, Airtel will control a 52% stake in Indus Towers, becoming the majority shareholder.

Recent Stake Movements

Last week, Vodafone sold 18% of its shares in Indus Towers through block deals for approximately ₹15,300 crore, leaving it with a 3.1% stake. Bharti Airtel participated in this transaction, acquiring an additional 1%, increasing its stake to nearly 49%.

Merger with Nxtra on the Horizon

Alongside this stake acquisition, Bharti Airtel plans to merge its fast-growing data centre business, Nxtra, with Indus Towers as part of a broader strategy to consolidate its operations. This merger aims to align Indus Towers for upcoming auctions and support Nxtra’s expansion.

Financial Implications for Vodafone

Vodafone, which has outstanding dues of around ₹5,400 crore to Indus Towers, is expected to use a significant portion of the proceeds from the deal to settle these liabilities. This step aligns with Vodafone’s strategy to reduce its substantial net debt, reported to be $42.17 billion.

Market Impact and Future Outlook

Bharti Airtel’s shares closed at ₹1,419.20, marking a 0.42% increase on June 24. The potential merger and increased stake in Indus Towers are anticipated to strengthen Airtel’s position in the market, especially as the telecom sector braces for tariff hikes and further consolidation.

Vodafone’s Strategic Moves

Vodafone’s recent sale is part of its broader strategy to reduce debt. The company previously announced plans to sell its then-28% stake in Indus Towers back in 2022, but significant progress has only been made recently.

The acquisition by Airtel and the subsequent merger with Nxtra could lead to substantial shifts in the telecom infrastructure landscape, potentially benefiting service providers and customers alike.