Also Read | Vodafone seeks to sell Indus Towers stake for up to $1.1 billion

The background

Airtel had recently purchased a 1% stake in Indus Towers from Vodafone Plc when Vodafone sold 18% of its stake for $1.8 billion.

Airtel currently owns 49% of Indus Towers, and this additional increase in stake would take it to 52%.

The telecom sector is also looking at a series of tariff hikes and Indus Towers being India’s largest tower infrastructure provider is a big beneficiary, the article read.

Also Read | Vodafone raises stake sale in Indus Towers to up to $2 billion: Report

What’s in it for Indus?

Indus Towers is likely to benefit as sources suggest that Airtel is in talks with Vodafone to use a large percentage of the stake sale proceeds to pay dues owed to Indus Towers, the report read.

Indus Towers had recently indicated that dues from Vodafone Idea stood at around ₹5,400 crore. A 3% stake at the current market price is over ₹2,000 crore, according to the report.

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What next?

Bharti Airtel is also planning to merge Indus Towers with data centre company Nxtra for three reasons: value unlocking, exit for Carlyle, and making Airtel asset light, sources told CNBC-TV18.

Carlyle, an American multinational financial services and asset management company owns a 24% stake in Nxtra, which it bought in 2020. Sources suggest that the merger of Nxtra in Indus Towers will allow Carlyle to exit.

“Nxtra’s dependence on parent Airtel for business performance does not value it correctly at present, investors are likely to ascribe a higher value once it is in a separate entity,” a source told CNBC-TV18. “In a way, arm’s length transaction with Airtel will be valued better if Nxtra is in a separate company.”