Bharti Infratel, Indus Towers May Invest Rs. 3,500 Crore CapEx Ahead of Merger

Bharti Infratel Ltd. and Indus Towers are likely to invest Rs. 3,500 crore in operations as capital expenditure for 2018-19 as they continue to operate on a business-as-usual mode till their merger happens before the end of the financial year. The merged entity will have, in its fold, more than 1,63,000 towers across India—the largest after China Tower.

The annual financial planning continues on course for both the companies as it is business-as-usual, and that Infratel’s CapEx is expected to be in the ballpark range of Rs. 1,200 crore in 2018-19. Indus Towers—where Infratel holds a 42 percent stake—is likely to infuse Rs. 2,300–2,500 crore as CapEx this year.

Indus Towers is jointly owned by Bharti Infratel (42 % holding), Vodafone (42 %), Idea Group (11.15 %), and Providence (4.85 %).

Bharti Airtel Ltd., which owns 53.5 percent in Bharti Infratel, will get a 33.8–37.2 percent stake in the combined entity. Its final shareholding depends on what Aditya Birla Group’s Idea and Providence do with their minority shareholding in Indus Towers.

Vodafone India will get between 26.7 percent and 29.4 percent of the Indus-Bharti Infratel combine. The merger will help unlock value for the companies which are locked in a tariff war unleashed by newcomer Reliance Jio Infocomm Ltd. that has hurt earnings and triggered consolidation in the sector. Vodafone and Idea Cellular Ltd. are already in the final stages to merge their mobile operations.