Tower infrastructure company Bharti Infratel on Monday said its board of directors has decided to explore acquisition of stake in Indus Towers.
The company is looking at acquiring the stake in one or more tranches in Indus Towers with an aim of making it a subsidiary or wholly-owned subsidiary of Bharti Infratel, it said.
According to industry experts, if the acquisition is successful, this will make the combined entity the largest tower company by a huge margin. Indus is already the biggest tower company with 1,23,073 towers with 2,98,929 co-locations in 15 circles. The combined entity is also well positioned to take on the next phase of growth as 4G and 5G rollout in the country.
With Vodafone, Idea and Reliance Communications out of the tower business, Bharti Infratel is set to compete with only American Tower, if the deal gets through.
According to sources, private equity investors could also pick stake in the combined entity.
Indus was incorporated in November 2007 and Bharti Airtel, Bharti Infratel, Vodafone India (certain of its subsidiaries), Idea Cellular and Idea Cellular Infrastructure entered into the Indus Share Holders Agreement (SHA) to govern their relationship with respect to Indus and its day-to-day operations.
In accordance with the Framework Agreement, Bharti Infratel, Vodafone India and Aditya Birla Telecom hold 42 per cent, 42 per cent and 16 per cent shareholding, respectively, in Indus.
During the quarter ended March this year, Aditya Birla Telecom transferred 4.85 per cent of its stake in Indus to P5 Asia Holding Investment (Mauritius) Ltd.
As on September 30, Bharti Infratel, Vodafone India and Aditya Birla Telecom hold shareholding interest of 42 per cent, 42 per cent and 11.15 per cent, respectively, in Indus.
Therefore, Bharti Infratel buying Indus Towers would mean the company paying the acquisition amount to these companies for buying all the stake. However, the company has not given any details as of now. Bharti Infratel deploys, owns and manages telecom towers and communication structures for various mobile operators.
The company has a consolidated portfolio of over 90,000 towers, which includes over 39,000 of its own towers and the balance from its 42 per cent equity interest in Indus Towers. It has presence in all 22 telecom circles.
Meanwhile, the company reported a 17 per cent drop in its consolidated net profit to ₹638 crore for the second quarter ended September 30, compared with ₹774 crore in the same period last year.
Revenue up 11%However, consolidated revenue for the July-September quarter rose by 11 per cent year-on-year (YoY) to ₹3,648 crore against ₹3,292 crore in the corresponding period last year.
“As Bharti Infratel and Indus Towers, we are well positioned to grab our fair share of market and create sustainable value for all stakeholders,” Akhil Gupta, Chairman, Bharti Infratel, said.
He said Indian telecom had embraced a data-centric model and was emerging the “showcase” of digital technology with operators rolling out 4G networks and India planning a leadership role on upcoming 5G technology and associated applications.