Indus Towers has announced the acquisition of 16,100 telecom towers from Bharti Airtel (12,700 towers) and Bharti Hexacom (3,400 towers) for a total consideration of up to Rs 3,300 crore. Following the development, Citi has reaffirmed its ‘Buy’ rating on the stock with a target price of Rs 490, viewing the transaction as a strategic move that enhances capital efficiency and supports future growth.
Citi highlighted four key positives of this acquisition:
- It will improve Indus Towers’ capital structure, as the company currently has a negligible net debt of Rs 1,000 crore (as of December 2024).
- The acquisition is in line with Indus’ core operations, making it a prudent capital allocation strategy.
- The deal is entirely debt-funded, meaning it will not impact dividend payouts, with Citi maintaining its Rs 18/share dividend forecast for the Q4FY25 results.
- The implied valuation of 6.5x EV/EBITDA (based on initial estimates) appears reasonable, pending further clarity on financial details.
With 5G rollout expansion expected to drive higher tenancy ratios, the deal further strengthens Indus Towers’ market position in India’s telecom infrastructure sector.
