Indus Tower becomes Airtel subsidiary after buyback; telco share hits 52-week high

Shares of Bharti Airtel are trading 2.37% up, its 52-week high, at ₹1,558.65 on the BSE today amid the announcement its tower unit Indus Towers Ltd will become a subsidiary of the company after ₹2,640 crore share buyback.

The Indus Towers board in July had considered and approved the buyback of up to 5.67 crore equity shares, representing 2.107% of the total shares at ₹465 apiece. "This is in reference to the Buyback of up to 56,774,193 equity shares (representing ~2.107% of the total number of equity shares in the paid-up share capital) by Indus Towers Limited, a joint venture company in which the Company currently holds 48.95% shareholding," says Bharti Airtel in an exchange filing.

The buyback committee of the board of directors on August 27, 2024, approved the basis of acceptance of 5,67,74,193 equity shares of the face value of ₹10/- each, from the eligible shareholders who tendered their shares.

With this, the shareholding of Bharti Airtel in Indus Towers increased to over 50% (i.e. ~50.005%) of its paid-up share capital. "Consequently, Indus Towers will become a subsidiary of the Company under the Companies Act, 2013." The total value of the share buyback amounts to ₹2,640 crore and does not include transaction costs, applicable taxes and other incidental and related expenses.

Amid the development, shares of Airtel's telecom-infrastructure arm surged to the intra-day high of ₹447.70 on the BSE, taking its m-cap to ₹1.20 lakh crore. Indus Towers reported a 43% jump in net profit at ₹1,926 crore for the April-June quarter, driven by robust tower additions and collection of past dues. Revenue was at ₹7,383 crore, up 4.3% Y-o-Y. Consolidated EBITDA was at ₹4,545 crore, up 29.4% Y-o-Y and an EBITDA margin of 61.6%.

Bharti Airtel, on the other hand, saw 158% Y-o-Y growth in its profit at ₹4,160 crore for the April-June quarter vs ₹1,613 crore in the year-ago period. The consolidated revenue stood at ₹38,506 crore, up 2.8% YoY. Airtel's India revenues for Q1’25 stood at ₹29,046 crore, up 10.1% YoY, while its mobile revenues surged 10.5% YoY. Q1 ARPU stood at ₹211 as compared to ₹200 in Q1’24. Airtel says it added 0.8 million users in the postpaid segment in Q1’25, reaching a customer base of 24 million.

In a separate release, Airtel also announced that it has tied up with tech giant Apple to provide Apple TV+ and Apple Music services in India. The company will reportedly shut down its streaming service Wynk Music in India. "Wynk Music has been at the forefront of offering quality music content for customers. In an exchange filing, "Wynk Premium users will roll into Apple Music and get exclusive offers," says Airtel.