Bharti Airtel Ltd is set to increase its stake in Airtel Africa Plc to nearly 90% in the coming years, according to chairman Sunil Bharti Mittal. This announcement coincides with the company's recent ₹28,200 crore share-swap deal to acquire a 16.3% stake in Airtel Africa from Indian Continent Investment Ltd, which will elevate Airtel's ownership in the African market to 79%.
Mittal emphasized the importance of this strategy for enhancing income flow back to Bharti Airtel and rewarding shareholders. He expressed confidence that the company would achieve a more significant presence in Africa over the next several years.
Leadership Transition
As Mittal approaches his 70th birthday, he is also focusing on succession planning. He mentioned that the next generation of the Mittal family is gaining experience by managing independent businesses outside the Bharti Group, a unique approach compared to other Indian family-run enterprises.
Mittal aims for Bharti Telecom to regain majority control of Bharti Airtel, targeting a shareholding of over 51% within the next decade. Currently, Bharti Telecom holds a 40.5% stake, with Singtel owning 20% and the Bharti Group holding an additional 20.46%.
He also noted that the ongoing buyback programs and future block deals would facilitate the gradual increase of Bharti Telecom's stake in Airtel.
Financial Performance
In the latest financial quarter, Airtel Africa reported a 33% year-on-year revenue increase, reaching $1.75 billion, with net profit more than tripling to $199 million. Bharti Airtel also reported a 33.5% rise in net profit, totaling ₹7,325 crore, driven by growth across various business segments.
Despite these gains, the average revenue per user (ARPU) experienced a slight decline, attributed to the lack of tariff hikes and weaker international roaming revenues due to geopolitical tensions.
Market Dynamics
Mittal highlighted the significant market opportunity presented by the combination of India and Africa, driven by demographic growth and increasing digital adoption. He expressed a commitment to ensuring that Bharti Airtel remains focused on sustainable growth rather than merely distributing dividends and buybacks.
Concerns were raised regarding rising smartphone prices and the slow transition from feature phones to smartphones, which could impact future growth.
