Indus Towers' short-term revenues hinge more on Vi turnaround than Africa plan

On September 2, Indus Towers' board of directors approved a foray into Africa, beginning with Nigeria, Uganda, and Zambia.

- DEVANGSHU DATTA

The telecommunication infrastructure firm will also look for opportunities in other African markets.

Even as the Bharti Group owns a little over 50 per cent stake in Indus Towers, its revenue growth hinges on Vodafone Idea's turnaround.

Airtel Africa has 37,579 towers, of which 2,157 are owned by parent Bharti Airtel. The three countries mentioned above account for less than 500 of Airtel Africa's towers. The Africa plan is not significant in the short term. The continent has suffered currency depreciation, and its tower companies trade at discounted valuations to global peers.

Further details on the African strategy, such as allotment of capital, timelines, etc., are awaited. Indus Towers is the largest listed telecom tower company in India. Typically, tower businesses are like annuities with stable cash flows. But consolidation, following the entry of Jio in 2016, hurt such companies as the number of telecom service providers declined. Tower companies operate with high leverage. Indus Towers' net debt, including lease liabilities, is ₹16,700 crore. The net cash held is ₹2,460 crore. The recent deal to buy 12,272 towers for ₹2,000 crore from Bharti Airtel was funded via cash from the balance sheet.