Airtel Africa Deal: Stock Jumps on Simplified Structure

Bharti Airtel's stock experienced a notable 5% surge to ₹1,883.50 on Thursday, following its board meeting on Wednesday. The primary focus for investors was the restructuring of the Africa telecom business ownership, which has now simplified the holding structure and eased concerns. Bharti Airtel, through its promoter group, will acquire the remaining stake in Airtel Africa Plc at a discount, funded by issuing new shares rather than cash. This transaction will result in a minor 2.4% equity dilution but is expected to be marginally EPS accretive. However, apprehension remains about the company's recent foray into the NBFC sector, announced on February 23rd, which has negatively impacted the stock price. Chairman Sunil Mittal clarified that the NBFC business will be entered into in a controlled manner, with Bharti Airtel planning to invest ₹14,000 crore in phases. The company also reported its Q4FY26 results, showing a slight increase in its India mobile subscriber base to 373 million and an average revenue per user (Arpu) of ₹257. Data usage per customer rose by 5% sequentially to 31.4 GB per month.

Looking ahead, the competitive landscape in India's telecom sector is evolving, with Vodafone Idea showing signs of stabilization due to reduced dues and leadership changes. Bharti Airtel's India mobile business generated robust operating free cash flow of approximately ₹50,000 crore in FY26. Management has indicated openness to distributing this strong cash generation through dividends and buybacks, differentiating its strategy from IT companies. Mittal highlighted Africa's telecom business as a key growth opportunity. Despite an 11% decline so far in 2026, the stock trades at a 10x EV/Ebitda multiple based on FY27 estimates, which appears reasonable for a utility business.