Indus Towers Shareholder Enhancement: Will investors get a buyback or a dividend?
Published on 02/05/2025 11:40 AM
Indus Towers Shareholder Enhancement: Will investors get a buyback or a dividend?Brokerage firm Ambit expects a dividend payout of ₹20 per share over the next six months. Additionally, the company may also announce a share buyback like it did in August 2024, in which Bharti Airtel may not participate.By Reema Tendulkar | Hormaz Fatakia May 2, 2025, 11:40:28 AM IST (Published)2 Min ReadShares of Indus Towers Ltd. are among the top losers on the Nifty 500 index on Friday, May 2, after the company delayed plans to enhance shareholder value through various options.
The company has formed a committee to evaluate the proposals and then make a suitable recommendation to the board.
Over the last three years, Indus Towers had not paid any dividends to shareholders due to their elevated provisions on account of doubtful receivables from Vodafone Idea.
Prior to that though, the company was paying dividends with payout as a percentage profits ranging from 47% in financial year 2022 to as high as 143% in financial year 2021.
However, with the improving situation in Vodafone Idea, who has started to repay pending dues and the cash flow situation improving, the street was hopeful that the company will reinstate the dividend payout.
In anticipation of this dividend resumption, the stock had recovered 33% from its 52-week low of ₹292, which it fell to in June last year. In the last three years, the stock is up 90%.
For financial year 2025, Indus Towers reported free cash flow of ₹9,848 crore, compared to ₹182 crore in financial year 2024, particularly due to the repayments from Vodafone Idea.
Brokerage firm Ambit expects a dividend payout of ₹20 per share over the next six months. Additionally, the company may also announce a share buyback like it did in August 2024, in which Bharti Airtel may not participate.
Ambit has a "buy" rating on Indus Towers with a price target of ₹554.
IIFL also has a "buy" rating on Indus Towers with a price target of ₹450. It is assuming a dividend of ₹20.5 per share iin fair value.
Shares of Indus Towers are currently trading 6% lower on Friday at ₹383.8. The stock is giving up some of the 15% gain it had seen over the last one month.Continue ReadingCheck out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!TagsDividend stocksIndus TowersIndus Towers shares