Bharti Airtel Limited (BSE:532454) is in talks to buy UK-based Vodafone Group Public Limited Company (LSE:VOD)'s 21.05% stake in Indus Towers Limited (NSEI:INDUSTOWER), which could potentially give India?s second ranked telco a controlling interest, said two people aware of the matter. If Vodafone Plc sells its Indus stake to Airtel, it could infuse some of the proceeds into Vodafone Idea Limited (NSEI:IDEA), its cash-strapped, local telecom venture with the Aditya Birla Group, industry experts said. However, talks are stuck over valuation, with the Sunil Mittal-led Airtel unwilling to acquire Vodafone?s stake at the current Indus share price, which has jumped over 77% since January.

Airtel, instead, wants a valuation of INR 210-INR 212 a share, or the level at which US private equity fund KKR & Co. Inc. (NYSE:KKR) and Canadian pension fund Canada Pension Plan Investment Board had sold stock in Indus in February 2024. Airtel is the biggest shareholder in Indus, with 47.95%; Vodafone Group has 21.05% and 30.97% is with the public, according to the tower company?s latest filing with the BSE.

A buyout of the Vodafone stake will boost Airtel?s shareholding to 69%. Indus shares ended 2.9% higher at INR 359.65 on the BSE on April 23, 2024, giving it INR 969,234.1 million market capitalisation. At this level, the 21.05% stake will cost Airtel INR 204,023.7 million, while at INR 210 ?

INR 212 per share, the deal will be worth around INR 120,260 million. Bharti Airtel shares jumped 3.4% to close at INR 1,342.30 on the BSE on April 23, 2024. ?Airtel is likely to push Vodafone Plc for a sharp discount (to Indus?

current share price) as it believes the business challenges for Indus very much remain, as key client Vodafone Idea is yet to close its full fundraise and has also not shared any concrete plans around clearing its massive backlog of old dues (to Indus),? said one of the people cited above. Bharti Airtel, Vodafone Plc and Indus Towers did not respond to ET?s queries.