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Indus Tower, Bharti Airtel, Vodafone Idea Merger to Create A Mega Tower Company

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Incorporated on November 30, 2006, Bharti Infratel is the renowned supplier of towers and connected infrastructure in India. It deploys, owns, and manages telecom towers and communications structures for numerous mobile operators. The Bharti Infratel’s consolidated portfolio of over 91000 telecom towers which includes over 31,000 of its towers and also the balance from its forty-second equity interest in Indus Towers which makes it mega tower infrastructure in India with its presence in all twenty-two telecom circles. India’s leading wireless telecommunications service supplier by revenue i.e., Bharti Airtel, Vodafone, and Idea cellular are the largest customer of Bharti Infratel. The Bharti Infratel has 9.8 % of the market share and 11.6% co-locations of the company.

The Indus tower is an independently managed company that has won the green mobile award for the best green product service. The company was awarded the 2012- CNBC Essar Steel Infrastructure Excellence award as the ‘Telecom infrastructure company of the year’. The Company offers passive infrastructure services to all the telecom operators and other wireless services providers such as broadband service providers. Bharti Infratel has a 42 % stake in Indus towers which promoted Indus Tower, incorporated in November 200, under a joint venture between entities of Bharti Infratel limited Vodafone idea India and Aditya Birla telecom to hive off the towers business in 15 telecom circles. The company has a 31% market share and 37.1 % co-locations.

Transaction Structure

Before the Vodafone-Idea merger, Idea and Providence shareholders of Indus towers as per the implementation agreement have been given an option to existing. Idea group has four exit options of 3.35 per cent. Bharti Infratel Limited will fund the same through accumulation through debt.

Fund receivable by idea and providence is Rs.7,20,217 crore to Rs.2,16,393 crore. The transaction is expected to be completed by the company by the end of the financial year ending before mid of 2019.

Shareholding Pattern

Transaction Detail

In this deal Bharti Airtel Limited (NSE: BHARTI) (Bharti Airtel), Idea Cellular Limited (NSE: IDEA) (along with its subsidiary ABTL, Idea Group) and Vodafone Group Plc (LSE: VOD) (Vodafone) are ready to merge the companies Vodafone’s, Idea Group’s and Providence Equity Partners (Providence) corresponding shareholdings in the leading tower company Indus Towers Limited (Indus Towers) into Bharti Infratel Limited (NSE: INFRATEL) (Bharti Infratel), making a combined company that will own 100% of Indus Towers (the “Transaction”).

The transaction will be structured as follows:

Indus Towers are to be integrated with and into Bharti Infratel through a theme of arrangement.

  • The Merger quantitative relation of 1565 shares of Bharti Infratel for each one of Indus Towers share is at intervals the vary counselled by the independent valuer. Supported the SEBI evaluation tips for Bharti Infratel, in relevancy to the projected theme, as of 23 April 2018 (INR363 per share), the Merger quantitative relation implies associate degree enterprise price for Indus Towers of INR715bn (US$10.8bn). this is often appreciated valuing Indus Towers at nine.3x EV/LTM EBITDA.
  • It is meant that Idea Group will sell its 11.15% shareholding for money coincidental with the completion of the theme. The money thought collectable by Bharti Infratel is going to be supported by a formula coupled to Bharti Infratel’s VWAP for the sixty-commerce day amount before completion of the merger. Supported Bharti Infratel’s VWAP throughout the last sixty commerce days before the date of this announcement. This might equate to money thought of INR65bn (US$1.0bn). In the role of money, the planned cluster is going to be able to elect to be issued with 207.9m new shares, supported by the Merger Ratio. Idea Group instead of cash will be able to elect to be issued with 207.9m new shares, based on the amalgamation ratio. This might be equivalent to 7.1% belongings within the combined company, on the basis that Providence additionally elects to receive new shares in exchange for its full 4.85% belonging in Indus Towers. All the proceeds from the sale of the 11.15% stake are going to be for the advantage of the entity ensuing from the merger of Vodafone India and Idea Group.
  • Providence can receive new shares reminiscent of 1.1% belongings within the combined company in exchange for 1.5% out of its 4.85% belongings in Indus Towers. The thought for the remaining 3.35% of its belongings in Indus Towers is going to be settled by Bharti Infratel in money or shares at Providence’s election. The valuation in terms of the money thought is going to be a clone of that for plan cluster and also the valuation terms for the shared thought are going to be supported by the Merger quantitative relation.
  • Vodafone is issued with 783.1m new shares within the combined company, in exchange for its 42% share possession in Indus Towers. On the idea that (a) Providence decides to sell 3.35% of its 4.85% shareholding in the company Indus Towers for cash. and (b) Idea Group decides to sell its full 11.15% share possession in Indus Towers for cash, these shares would be corresponding to a 29.4% shareholding within the combined company. The dealing values Vodafone’s holding is at INR284bn (US$4.3bn).
  • On that basis, Providence decides to sell 3.35% out of its 4.85% shareholding in Indus Towers for money. (ii) Idea Group decides to sell its full 11.15% shareholding in Indus Towers for money. Bharti Airtel’s shareholding is going to be diluted from 53.5% in Bharti Infratel company nowadays to 37.2% within the combined company.

Synergy Benefits 

Commercial Synergy

  • Outside China making a listed Pan-India tower company which will be a mega tower company in the world with over 16 3000 Towers.
  • Highly complementary footprints to continue to support the delivery of the Government of India’s vision of ‘Digital India’.
  • To offer high-quality passive infrastructure services to all Telecom operators on a non-discriminatory basis.

Key Highlights

  • Bharti Airtel and Vodafone Idea will have equal management rights and board seats in the combined company.
  • Comprised of 11 directors, of whom three will be appointed by each of Bharti Airtel and Vodafone, one will be appointed by KKR/Canada pension plan investment board and four (including the chairman) will be independent in the board of the combined company.
  • In the combined company none of Bharti Airtel Vodafone-Idea group will be subject to lock-in on their shareholdings.
  • The merger ratio i.e.,1,565 shares of Bharti Infratel for each Indus Towers share is inside the vary counselled by the independent evaluator. The dealings price Indus Towers at an enterprise value of INR715bn (US$10.8bn) or 9.3x EV/LTM EBITDA.
  • The combined company, which can own the individual businesses of Bharti Infratel and Indus Tower, will change its name to Indus Towers Limited and can still be listed on the Indian Stock Exchanges.
  • Providence has the choice to elect to receive money or shares for 3.35% of its 4.85% shareholding in Indus Towers, with the balance changed for shares.


The merger between Bharti Infratel and Indus Tower will be tax compliance under the Income Tax Act


Bharti Infratel has been valued based on market price method approach Rs.67,048 crore and whereas the Indus Tower company has been valued at Rs.64,595 crore average of income and comparable multiple method approach. The valuation is subjected to change for net debt and working capital. khud Bharti Airtel Vodafone Idea will have equal vote seat management rights in the combined company. For the 60-trading day period before the completion of the amalgamation i.e., the effective day, the exit price to Idea and providence will be determined Bharti-Infratel VWAP. The merger ratio is 1565 shares in Infratel for everyone Indus share as of the date of implementation agreement.


Standalone FiguresBharti InfratelIndus TowersCombined Company
Towers in Nos39,5231,23,6391,63,162
Tenancies in Nos88,6652,78,4083,67,073
Tenancy Ratio in Nos2.24x2.25x2.25x
Revenue (INR Crores)6,61818,74225,360
EBITDA Margin48%41%43%
Net debt / (net cash)6,8163,9185,559
EV/ EBITDA9.639.27

Considering the EV/LTM EBITDA of both companies, it can be seen that the valuation is done at par. is now on Telegram. Follow us for regular legal updates and judgments from the Court. Follow us on Google NewsInstagramLinkedInFacebook & Twitter. You can also subscribe to our Weekly Email Updates. You can also contribute stories like this and help us spread awareness for a better society. Submit Your Post Now.

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