Indus Towers shares drop 5%; here is why stock is down after board's nod to enter African market

Entry into the African market will mark the first-ever overseas expansion of Indus Towers.

"The Board of Directors, at a meeting held earlier in the day, reviewed and deliberated on strategic opportunities to expand the company's footprint across select international markets," the company said in a statement.

The company has received approval to foray into African markets, beginning with Nigeria, Uganda, and Zambia, as these markets offer attractive prospects for revenue diversification, operational scalability, and long-term value creation, the statement said.

Why shares are trading lower

Shares of the company were in the red, as, according to analysts, investors could be concerned, as this may lead to deployment of cash for these operations and not towards rewarding shareholders with dividends.

In May this year, Indus Towers was supposed to announce a bonus or buyback of shares or both at its board meeting. However, the meeting was delayed, leading to a decline in the stock, the report added.

Global investment firm CLSA believes that Indus Towers' plan of revenue diversification is unlikely to be significant, as Nigeria, Uganda and Zambia account for less than 500 towers out of the 37,579 towers of Airtel Africa, of which the company owns 2,179.

Moreover, news reports said that investors are concerned about dividend payouts, Vodafone Idea's sustainability, and Bharti Airtel's slowing rollout, which, according to Citi, appears overdone.

"Indus will leverage its robust financial position and anchor customer relationship with Bharti Airtel to establish a strong and competitive presence in these regions. As part of its broader growth strategy, the company will continue to evaluate expansion opportunities in other African markets where Airtel has an established presence," the statement said.

The company said that the strategic direction complements the government's broader vision of encouraging Indian enterprises to expand globally and evolve into multinational entities.

"The Board's approval to enter international markets in Africa unlocks our vision for long-term sustainable growth and value creation for our shareholders. By leveraging our expertise in delivering innovative and cost-effective solutions, we are well-positioned to differentiate ourselves in Africa's fast-growing telecom market," Indus Towers Managing Director and CEO Prachur Sah said.

Indus Towers: Recent developments

In August 2025, Indus Towers and Bharti Hexacom inked a deal. Bharti Hexacom said it received approval from shareholders to carry out related-party transactions of up to ₹2,200 crore with Indus Towers for the sale, purchase and lease of assets and equipment, according to regulatory filings.

The material transaction for which approval was sought included "purchase, sale, exchange, transfer, lease of business asset or assets and/or equipment,including passive infrastructure assets, to meet its business objectives or requirements" and "selling or otherwise disposing of or leasing or buying property(ies) to meet its business objectives or requirements", as per the notice of the 30th AGM held on Wednesday.

The Bharti Airtel group firm in a regulatory filing said its resolution "to approve material related party transactions with Indus Towers Limited" has been approved with 88.28% votes.

Indus Towers: Q1 FY26 Results

Indus Towers posted about a 10% decline in consolidated profit after tax (PAT) to ₹1,736.8 crore in the June quarter (Q1 FY26), mainly due to provisions made on doubtful receivables from a leading client.

The company had posted a profit of ₹1,925.9 crore in the same period a year ago.

"Net profit for the quarter was at ₹1,737 crore, down 9.8% YoY," the statement said.

Indus Towers said there were doubts on the receivables from a large customer of the group, which accounts for a substantial part of its revenue from operations for the quarter. The said customer constituted a significant part of outstanding trade receivables and unbilled revenue as of June 30.

"The group continues to recognise revenue from operations relating to the customer for the services rendered; however, the group does not recognise the revenue equalisation asset on account of the straight lining of lease rentals considering the customer's financial condition. The group carries an allowance for doubtful receivables of ₹2,099 million as of June 30, 2025," the company said.

About Indus Towers

Indus Towers Limited was formed by the merger of Bharti Infratel Limited and Indus Towers. This combined strength makes Indus one of the largest telecom tower companies in the world.

Indus Towers has over 251,773 towers and 411,212 co-locations (June 30, 2025) and a nationwide presence covering all 22 telecom circles.

Indus’ leading customers are Bharti Airtel (together with Bharti Hexacom), Vodafone Idea and Reliance Jio Infocomm, which are the leading wireless telecommunications service providers in India by revenue.