Respite to Vodafone Idea as Bharti Infratel-Indus Towers Merger Approved by DoT

The Department of Telecommunications (DoT) has reportedly cleared Bharti Infratel’s mega-merger deal with Indus Towers, offering much-needed respite for Vodafone Idea Limited. The companies received the critical Foreign Direct Investment nod from the telecom department, paving way for the creation of one of the largest towers companies in the world. “The final FDI enhancement approval required for Indus-Infratel merger has come. This is a big positive for the Vodafone-Idea,” an insider told LiveMint. The deal announced way back in April 2018 was delayed for several months pending the DoT approval.

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Infratel-Indus Merger Will Financially Help Vodafone Idea

The approval comes just days after Vodafone Idea chief Kumar Birla met top government officials seeking relief for the ongoing AGR troubles. Birla had met Telecom chief secretary Anshu Prakash on Tuesday and then met Finance Minister Nirmala Sitharaman the following day.

With the merger done, Vodafone Idea now plans to monetise its tower assets in the company. Bharti Infratel and Vodafone hold 42% stake each in Indus Towers, while Vodafone Idea holds 11.15% stake in the firm. The deal will fetch Vodafone Idea Rs 4,500 crore according to insiders who say that the company is expected to use to pay its AGR dues. The company owes the government Rs 56,709.49 crore in Adjusted Gross Revenue (AGR) as per DoT estimates.
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“The merger should come through in a couple of weeks now. Vodafone Idea has an 11.15% stake in Indus Towers, which it plans to monetise after the tower merger. This stake sale could fetch Vodafone Idea about Rs 4,500 crore,” said the insider.