In Short:
The Competition Commission of India (CCI) approved Bharti Airtel’s plan to increase its stake in Indus Towers to over 50% after a share buyback. Indus Towers provides telecom infrastructure. Additionally, CCI also approved CVC Capital Partners’ acquisition of a significant stake in financial services company Aavas Financiers, triggering a public share offer according to regulatory rules.
Approved Stake Increase in Indus Towers
On Tuesday, the Competition Commission of India (CCI) granted approval for Bharti Airtel to increase its stake in Indus Towers following a share buyback by the telecom infrastructure provider. Indus Towers specializes in deploying, owning, and managing passive telecom infrastructure for various mobile operators.
“The Commission approves an increase in the percentage shareholding of Bharti Airtel Ltd in Indus Towers Ltd to 50.005 per cent pursuant to the buyback of shares by Indus Towers,” the CCI stated in its release.
Details of the Share Buyback
In August, Bharti Airtel announced its intention to hold more than a 50 per cent stake in Indus Towers following the conclusion of its ongoing Rs 2,640-crore share buyback scheme. The buyback, which began on August 14, involves over 5.67 crore shares at a price of Rs 465 apiece, representing approximately 2.107 per cent of the total number of equity shares in the company’s paid-up share capital.
Currently, Bharti Airtel, one of the promoters of Indus Towers, holds a 50 per cent stake in the company, according to exchange data.
Approval for CVC Capital Partners
In another significant decision, the CCI also approved the proposal by CVC Capital Partners, based in Luxembourg, to acquire Aavas Financiers, a financial services firm registered with the National Housing Bank as a non-deposit-taking housing finance company. Aavas Financiers engages in providing home loans, MSME business loans, and loans against property.
“The proposed transaction pertains to the acquisition of shares and control by Aquilo House Pte Ltd in Aavas Financiers following the execution of share sale agreements among the acquirer, the target, and certain existing promoters,” the fair trade regulator reported.
Mandatory Open Offer Requirement
Aquilo House is affiliated with the private equity and investment advisory firm CVC Capital Partners Plc. The competition watchdog has also approved a mandatory open offer per the Securities and Exchange Board of India (SEBI) rules on substantial acquisitions of shares and takeovers.
In August, Aquilo House announced definitive agreements to acquire equity shares amounting to a 26.47 per cent stake in Aavas Financiers from Lake District Holdings (an affiliate of Kedaara Capital) and Partners Group ESCL. The completion of these agreements triggered the obligation for the purchaser to make an open offer in compliance with SAST norms.
Under SEBI regulations, CVC Capital Partners are required to make a public announcement of an open offer, as their shareholding exceeds the 25 per cent threshold limit. Transactions surpassing specific thresholds necessitate regulatory approval, which is aimed at preventing unfair business practices and fostering fair competition in the marketplace.
