Citi has reiterated its ‘Buy’ rating on Indus Towers, with a target price of ₹485 per share, citing potential dividend growth following Vodafone Group Plc’s planned sale of its remaining 3% stake in Indus Towers. This move is estimated to generate proceeds of ₹2,700-2,800 crore. After repaying $101 million in borrowings, Vodafone plans to infuse ₹1,900-2,000 crore into Vodafone Idea to clear past dues to Indus Towers.
This repayment could add ₹7 per share to Indus Towers’ valuation and enable dividend payouts of ₹11-12 per share in H2FY25. Citi projects annual dividends exceeding ₹20 per share in FY26 and FY27, translating into a compelling 6% dividend yield at current levels.
Recent Developments: Vodafone Idea continues to face liquidity issues, which makes these infusions critical for clearing dues to Indus Towers. Furthermore, recent moves in the telecom sector, including tariff hikes by competitors, could support earnings growth for Indus Towers.
