As the Department of Telecommunications approves the merger of Bharati Airtel Bharati Infratel and Indus Towers, the shares of Vodafone Idea and Bharati Airtel surged.  Indus Towers is a joint venture between Bharati Infratel, Vodafone Idea and Vodafone Group. While Bharti Infratel and Vodafone Group hold 42 percent stake each, Vodafone Idea holds 11.15 percent stake in Indus Towers. The proposed merger would allow Vodafone Idea which is currently in crisis following the Supreme Court’s order to repay the debts, to raise funds by offloading its stake in the company. Vodafone Idea currently owes around 50,000 Cr. to the government, hence timely completion of merger is crucial for the company.                 

Combined Entity to Become the Largest Telecom Tower Company in India

Bharti Airtel, Vodafone Group and Idea Cellular announced an agreement for the merger of Indus Towers and Bharti Infratel in April 2018. This merger would become the second largest telecom tower company in the world and the largest outside China, creating a pan-India network of over 163,000 towers across 22 telecom circles. In the upcoming combined company which would be called as Indus Towers Ltd., Bharti Airtel, which currently owns a 53.5 percent stake in Bharti Infratel will hold 33.8 to 37.2 percent and Vodafone Group will hold 26.7 to 29.4 percent. Indus Towers Ltd would fully own the businesses of Bharti Infratel and Indus Towers and will continue to be listed on the stock exchanges.                   

The completion of proposed merger would largely depend on the outcomes of the Supreme Court’s verdict on AGR dues. In spite of the government’s approval for the merger, Bharati Infratel has extended the deadline for the completion of the merger for the third time. The latest deadline for the merger is 2020, April 24. “The final decision to implement the scheme will be taken by the board keeping in mind the best interest of the company and its stakeholders including the assessment of the current crisis facing the telecom industry and the extent of its impact on the company’s major customers,” Bharti Infratel said.