Shares of Indus Towers Ltd. fell 4.78% to ₹313.70 on Tuesday, September 2, as investors reacted to the company’s decision to expand into African markets, including Nigeria, Uganda, and Zambia. The decline also followed brokerage CLSA’s move to cut its price target for the stock from ₹595 to ₹520, even as it maintained its “high conviction” outperform stance.
The company said the expansion plan is aimed at revenue diversification and long-term value creation. It highlighted its strong financial position and anchor relationship with Bharti Airtel, which operates across Africa, as key enablers of this strategy.
However, analysts and investors raised concerns about the deployment of cash into international operations at a time when shareholders are awaiting clarity on dividends or buybacks. Indus Towers has not declared a dividend since May 2022, largely due to delayed payments from its key customer, Vodafone Idea.
In May this year, the company had indicated it would explore a bonus, buyback, or both, but the matter was postponed as the board decided to constitute a committee for deeper evaluation. A final decision is still pending.
CLSA noted that while the African entry signals diversification, the impact may be limited. Nigeria, Uganda, and Zambia together account for fewer than 500 towers out of Airtel Africa’s 37,579, with Indus Towers’ share at just 2,179 towers.
The cautious outlook weighed heavily on investor sentiment, pulling the stock down nearly 5% in trade.
