Bharti Airtel is planning to list its Airtel Payments Bank and Nxtra data centre unit in the next few years. While the payments bank is required to go public within 10 years of operations, the Nxtra listing will be aimed at monetization, ET reported, citing a senior company executive.
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Airtel Payments Bank
Airtel Payments Bank, which began operations in 2017, turned profitable and reported a net profit of Rs 18.5 crore on Rs 700 crore revenue in the third quarter of this financial year. It is expected to be the first to hit the market. "We have some mandate, we have been net worth positive for some time. So, over the next couple of years, we should potentially see an IPO in the payments bank," the executive was quoted as saying in the report.
Nxtra Data Center
Bharti Airtel's data centre subsidiary Nxtra, in which Carlyle holds a 24 percent stake, currently holds a 12 percent market share in India's fragmented data centre market. The company posted a net profit of Rs 231.8 crore on Rs 1,826.6 crore revenue in FY24. While an IPO or stake sale is being considered, Airtel is prioritizing expansion, with plans to double capacity to 400 MW and acquire more land.
"It is an asset that we can divest or create an IPO or go down in our shareholding (in some years). Today we have around 75 percent, which can be divested," the executive reportedly said, adding, "But for now, Bharti Airtel has big plans for Nxtra for the next couple of years, with big-ticket investments planned in building data centre capacity and acquiring more land for the purpose."
"It's a very fragmented market (data centre). There are many players, and we have got large plans over the next couple of years... we will continue to invest behind Nxtra right now," the executive said, according to the report.
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Airtel is reportedly considering divesting its stake in Nxtra, as its business model differs significantly from telecom. "It's largely land and power related. But now is not the time to do that (divestment), I think because there’s so much of build that is happening and so many contracts that will materialise, so we do want to make the investment and create a good asset. But it's an asset that can be monetised for sure," the executive said, as quoted in the report.
Nxtra provides data centers in over 120 locations, serving enterprises, hyperscalers, startups, SMEs, and government entities. The company plans to double its current capacity to exceed 400 MW in the coming years.
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Airtel’s Enterprise Business Revamp
Meanwhile, Airtel is also looking to revamp its enterprise segment under Airtel Business, which generated Rs 5,646 crore in revenue in Q3 FY24, contributing 16 percent of consolidated revenue. The company is focusing on cloud, cybersecurity, and IoT to tap into the growing demand, despite stiff competition from 30-40 players in subsea cables and related sectors.
"In cloud, Airtel is a small player currently. But we are trying to solve the problem around cloud proposition because we are one of the largest users of our own cloud. We use it for all our applications, we run almost 250 petabytes of data on cloud," the executive reportedly said.
Many companies are grappling with rising cloud costs, and finding a solution could unlock significant revenue potential, the executive noted. He added, "Things like cloud, cybersecurity, we need to start accelerating dramatically. We are not happy with where we are right now."
