Indus Towers, a joint venture company, is set to become a subsidiary of Bharti Airtel following the conclusion of its buyback exercise. Indus Towers is conducting a buyback of up to 56,774,193 equity shares, representing approximately 2.107 percent of its total paid-up share capital. As a result, Airtel, which currently holds a 48.95 percent shareholding in Indus Towers, will see its shareholding increase to around 50.005 percent upon the completion of the buyback.
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Airtel's Stake in Indus Towers
Once the buyback is completed, Airtel's stake will exceed 50 percent, making Indus Towers a subsidiary under the Companies Act, 2013. With this change, Airtel will hold a majority stake in the telecom tower company after the conclusion of the buyback exercise.
This change in status occurs because, under the Companies Act, 2013, a company becomes a subsidiary when another company holds more than 50 percent of its total share capital or controls the composition of its board of directors.
Indus Towers Buyback Exercise
"...Subject to the completion of relevant activities for the Buyback within the stipulated timeline prescribed under the Letter of Offer (including the payment to be made to the eligible shareholders whose shares have been accepted as part of the Buyback and the extinguishment of such equity shares), the shareholding of Bharti Airtel Limited (one of the promoters of the Company) in the Company will increase to approximately 50.005 percent. Consequently, Indus Towers Limited will become a subsidiary of Bharti Airtel Limited under the provisions of the Companies Act, 2013," Indus Towers said in an exchange filing late on August 27.
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With the increase in shareholding to over 50 percent, Airtel will gain a controlling interest in Indus Towers, making it a subsidiary.
