Indus Towers Shareholding:
Bharti Infratel - 42%
Vodafone group - 42%
Vodafone-Idea - 11.15%
Providence - 4.85%
As per the merger agreement, Vodafone-Idea and Providence have the option to receive shares or cash for 11.15% and 3.35% stakes in Indus respectively.
It was mentioned in their con-call that this debt was raised for cash payment to Vodafone-Idea and Providence.
Bharti Infratel is deliberately delaying this merger due to SC AGR ruling. They are waiting for final ruling from SC and if it is favorable to Voda-Idea and Voda-Idea survives, then they may go ahead with merger process.
Also, one of the main benefit mentioned for merger was double taxation of dividend paid by Indus Towers till FY20 (Tax on Indus dividend payment to Bharti Infra and similar tax on Bharti Infra dividend payment to its shareholders). But with new dividend taxation rule, its taxed only in the hand of Bharti Infra shareholders.
I don’t think anyone have doubt on Airtel survival. But for Bharti Infra shareholders, real question is what’ll happen to Voda-Idea. If Voda-Idea gets favorable ruling from SC and they are able to bring equity by themselves or selling their stake to someone else, then Bharti Infra could turn out out to be a great compounding story.
If you’ll see the listed Tower companies around the world, they are among the best compounders of last 2 decades with good dividend yields.
Disc: Invested (before SC AGR ruling) and still holding