Bharti Airtel receives CCI nod to raise stake in Indus Tower to 50.5% following share buyback scheme | Stock Market News

The Competition Commission of India (CCI) on Tuesday, October 22, cleared telecom giant Bharti Airtel’s proposal to increase its stake in Indus Towers following a buyback of shares by the telecom infrastructure company. “The Commission approves an increase in the percentage shareholding of Bharti Airtel Ltd (Bharti Airtel) in Indus Towers Ltd (Indus Towers) to 50.005 per cent pursuant to the buyback of shares by Indus Towers,” CCI said in a release.

In August, Bharti Airtel announced it would hold over 50 per cent of Indus Towers after completing the telecom infrastructure firm’s ongoing ₹2,640-crore share buyback scheme. According to exchange data, Bharti Airtel, one of the company’s promoters, currently holds a 50 percent stake in the company. With the regulatory watchdog’s approval, the stake has been raised to 50.5 per cent.

Also Read: Indus Towers eyes improved cash flows amid better collections from Vodafone Idea

On August 14, Indus Towers commenced the buyback of over 5.67 crore shares at ₹465 apiece, representing approximately 2.107 per cent of the total number of equity shares in the company’s paid-up share capital. Indus Towers is a passive telecom infrastructure provider that deploys, owns, and manages passive telecom infrastructure for various mobile operators. 

Indus Towers share buyback scheme

Indus Towers opened its share buyback program on August 14, 2024. The initiative, which aims to buy back up to 56.77 million equity shares at a price of ₹465 per share, will close on August 21, 2024. The buyback represented approximately 2.107 per cent of the company’s total equity shares, with a maximum expenditure of ₹2,640 Crore, excluding transaction costs. 

The process followed the tender offer route in accordance with the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018. Eligible shareholders who held equity shares as of the record date, August 9, 2024, were notified electronically. The details of the Letter of Offer and the Tender Form are also accessible on the company’s official website.

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Samridhi Rodhe, Indus Towers’ Company Secretary and Compliance Officer, stated, “This buyback aligns with our ongoing efforts to optimize returns to our shareholders and enhance the company’s earnings per share.” 

In the June quarter of FY25, Vodafone Group Plc sold 17.98 per cent of its shareholding in Indus Towers through its indirect wholly-owned subsidiaries. Despite the shareholding changes, Bharti Airtel Ltd. and Vodafone continue to promote Indus Towers, which commands a market cap of ₹96,741.43 crore.

Indus Towers Q2 Results

Indus Towers reported a 71.7 per cent year-on-year rise in consolidated net profit to ₹2,224 crore for the September 2024 quarter. Notably, Q2 FY25 had a write-back of ₹1,077 crore in provision for doubtful receivables, aided by collections against past overdue, the company said in its earnings release.

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For the just-ended quarter, the consolidated revenues stood at ₹7,465 crore, 4.7 per cent higher than the year-ago period. “Our operational performance reflects sustained demand for network expansion and our endeavour towards securing a larger share of our customers’ rollouts. This continues to drive our financial performance, aided by a steady collection of past overdue from a major customer,” said Prachur Sah, Managing Director and CEO of Indus Towers.

Sah noted that, given the healthy cash generation, the company had rewarded its shareholders through buybacks during the quarter. “We expect the performance to continue in the wake of network expansion plans of our customers over the near to medium term. Guided by our strategic priorities and inherent capabilities, we remain confident of capitalising on these opportunities and generating value for all our stakeholders,” said Sah.