On Wednesday, Vodafone said it sold 484.7 million shares amounting to 18 per cent stake in Indus Towers, raising Rs 15,300 crore or around €1.7 billion. The shares were sold through block deals on the stock exchange.
Vodafone had initially planned to sell around 10 per cent, but strong investor interest prompted it to raise it significantly, according to Reuters.
Indus Towers intimation:
How much of a positive will this be for Indus Towers, if this happens?
"Bharti Airtel had bought 1 percent additional stake in Indus Towers in the transaction, taking its holding in the towers company to nearly 49 percent. The proposed additional stake acquisition would make Bharti Airtel the majority stakeholder in Indus Towers with a 52 percent shareholding.
Airtel plans to Indus Towers with its data centre business Nxtra, reported CNBC TV18. Further, Indus Towers cash would be used for Nxtra expansion, said the report. Airtel aims to make its telecom business asset light via Nextra and Indus Towers merger.
Consolidation of the majority shareholding in Indus Towers, and then merging it with the data centre business is apparently part of Bharti Airtel’s mega plan to of two-pronged strategy to capitalise on Indus Towers.
On the other hand, Vodafone is likely to use stake sale proceeds to pay dues to Indus Towers. A recent Reuters report had said that Vodafone Group was looking to sell its entire $2.3 billion stake in Indus Towers as part of a strategic move to pare its hefty debt.
One should also see it as poison pilling from a competition point of view. If Reliance had bought it out, it’s tower count would have jumped big and also push Airtel to spend even more to catch up. This move should be seen as “what if I don’t buy it but my competitor does?”
Indus Towers expects growth as Airtel, Vodafone Idea expand: Analysts
Regarding nxtra. https://www.communicationstoday.co.in/more-likely-dilute-holdings-in-nxtra-not-merge-with-indus-towers/
Oops! This could have been an amazing shot in the arm for Indus Towers. Let’s hope Airtel can find new avenues for deploying the cash flow generated by Indus
Any views on the latest results?
Even after good results , share price has been falling heavily.
Isn’t that pretty much the market’s modus operandi in most companies reporting good results? Pump a depressed earnings company’s stock price to the point of overvaluation, wait for a few good quarters and dump it.
Another reason for fall is most likely Vodafone Idea crashing from 16 to 7.x.
hmm…gt it…
any views on the results, if you have been tracking it fundamentally?
Airtel’s 5G network expansion contributed to incremental revenue from tower additions, some reduction in energy costs due to increasing adoption of solar energy in tower sites could also have helped with the margin rise. This is likely to continue.
There’s also the one time addition of 924.8 Cr (VI’s doubtful due), which has boosted margins.
I posted my investment thesis below. Hope it helps.
Very good report .Only major issue is Starlink entry. They are just entering and given the size of our market elon will move fast and disrupt this business . Indus is staring at a huge threat . time only will decide
Thanks Balaji
(Mr. Tejinder Kalra - COO – Indus Towers Limited
“Yes Mr. Himmatramka we said it in the past all this satellite connectivity companies that are coming in whether it is Starlink or the other competitors to them it is only going to provide complementary services to the telecom services that there are and largely as of now to uncovered areas because transmission networks are very difficult to reach out into some of those places and the satellite provides primarily with the call connectivity. So we do not see that as a threat to the tower requirements from the operator at this
stage at least.”) - Management about Starlink in Q3 24 concall.
I agree with the management. As per my research, Satellites excel at broad coverage, not high-density, low-latency throughput in populated areas, which towers are better suited for. Launching satellites are very expensive too, the costs would be astronomical to accommodate current data demands with just satellites.
Thanks. What happens in US where they are well established . it will give a good indication particularly in densely populated cities like NY.
Starlink mainly seems to be used in rural areas of the US. The speeds are too slow to compete with broadband & tower-based mobile operators.
In a report filed with the Federal Communications Commission in August 2024, Starlink said it had grown to around 1.4 million subscribers in the US since its debut in 2021. That only makes up about 1% of all internet connections in the country, but it’s been a godsend for people in rural areas.
There’s been some concern about whether Starlink can keep up with increasing service demand. The FCC defines broadband as 100 megabits per second download and 20Mbps upload. That’s a bar Starlink has never reached in the US.
The most recent data from Ookla in 2023 found that Starlink users in the US receive 65/10Mbps on average, with 58 milliseconds of latency.
In its three years of collecting speed test data on Starlink, the company has never reached the benchmark set by the FCC. The closest it got was the last quarter of 2021 when it hit 105/12Mbps.
From PCMag: " Starlink scores a perfect 10 for coverage. It also tends to do well in our Reader’s Choice ISP survey. This year (2024), however, that high coverage score doesn’t make much of a difference. Ultimately, Starlink is hamstrung by its high prices and low speed. It doesn’t even make the top 10 this time around."
Best,
Sharad
OpenSourceInvestor @ Substack
