Indus Towers Stock Slides As African Foray Sparks Concerns Over Dividend Payout

Indus Towers' stock fell by over 5% on Wednesday after the company announced its entry into African markets, starting with Nigeria, Uganda, and Zambia.

After market hours on Tuesday, Indus Towers said that its move to African markets will boost revenue diversification, operational scale, and long-term growth. The telecoms tower maker plans to build a competitive presence in these regions by leveraging its financial position and longstanding partnership with Bharti Airtel.

As part of its broader growth strategy, it will also explore expansion into other African markets where Airtel already operates.

The stock is likely responding to concerns that available cash could be directed toward expansion rather than dividend payouts. Notably, the company has not distributed any dividends to shareholders since May 2022.

CLSA Raises Concerns About Dividend Distribution

While CLSA reiterated its“high conviction” outperform rating on Indus Towers, it lowered the price target to ₹520 from ₹595. CLSA noted that the company's revenue diversification plans may have limited impact, as Nigeria, Uganda, and Zambia together contribute fewer than 500 towers out of Airtel Africa's 37,579 towers, of which Indus owns only 2,179.

CLSA emphasized that the management should prioritize strengthening the company's capital structure by maintaining high dividend payouts, adding that the delay in dividends remains unjustified.

Stock Watch

Despite today's declines, retail sentiment for Indus Towers on Stocktwits remains 'bullish'. It was 'neutral' a week ago. Sentiment on the platform has significantly varied around the stock over the past year, ranging from 'extremely bearish' to 'extremely bullish.

Year-to-date, the stock has shed 7.7%. A one-year chart shows significant losses of more than 28%.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

MENAFN03092025007385015968ID1110010149