Indus Towers: Shareholder Rewards & Vi Debt Reduction

Vi’s Debt Reduction and Indus’s FCF Improvement

Indus’ leadership had formerly stated it was challenging to think about reward payouts to shareholders in the absence of exposure around future collections from Vi. That scenario has actually transformed, and the company’s FCF account has been steadily enhancing ever considering that Vi began paying its regular monthly fees from January 2023. Vi has also been removing past financial obligations.

Analyst Expectations for Shareholder Returns

“We expect Vi receivables of 500 crore to be removed in 4QFY25 and likewise expect Indus to introduce returns along with its 4Q results,” BofA Securities claimed in a research note. Indus Towers, a Bharti Airtel subsidiary, reports fourth-quarter results on April 30. It has a returns policy of dispersing its excess cash (board-determined), or 100% of totally free cash flows (FCF).

Indus’ 9MFY25 FCFs stood at 5,900 crore. Swiss brokerage firm UBS approximates Indus will certainly announce a returns of Rs 6,000-6,100 crore, or a reward per share (DPS) of more than Rs 20, in keeping with its payment policy of 100% of free capital.

Vi’s Network Expansion Benefiting Indus Towers

Analysts, in fact, except Indus to be the leading recipient with Vi on track to conclude its pending 25,000 crore debt-raise following its recent return to an investment-grade score – a vital demand for banks to offer financing. “We believe Indus will certainly be the biggest beneficiary of network rollouts by Vi, as the latter is boosting facilities by releasing macro websites and high-powered little cells to tackle insurance coverage and capability challenges where Indus dominates the market,” Ambit Capital stated.