Mumbai: Shares of Indus Towers Ltd declined by as much as 7 per cent on Friday, May 2, following the company’s decision to defer announcements related to shareholder value enhancement. The stock, which had rallied 15 per cent in the past month, was among the top losers on the Nifty 500, trading 6 per cent lower at Rs 384.
Board Withholds Bonus and Buyback Decisions
In its quarterly update, the company refrained from declaring any concrete steps regarding potential bonus shares, share buyback, dividends, or debenture issuances, all of which had been strongly anticipated by investors. Instead, Indus Towers stated that its board had decided to form a committee to evaluate all options before making a final decision.
This came as a disappointment, especially since this could have been the first-ever bonus share issuance for the nearly 4 lakh small shareholders of the company. Indus Towers last conducted a buyback in early 2024, which was its first since 2016. However, the stock continues to trade below the buyback price of Rs 465, despite touching a 52-week high of Rs 460 recently.
Financials Show Moderate Growth, Margins Under Pressure
On the operational front, Indus Towers reported a 2.4 per cent quarter-on-quarter revenue increase and 7.4 per cent year-on-year growth for the fourth quarter. However, EBITDA margins declined sequentially, mainly due to the reversal of provisional doubtful debts from Vodafone Idea, its largest customer.
Vodafone Idea has started settling its dues, leading brokerages to expect dividends in the range of Rs 10–Rs 20 per share, which ultimately did not materialize in this announcement cycle.
Investor Sentiment Takes a Hit
Market participants had priced in some form of shareholder reward, given the company’s improved financial health and customer repayments. The absence of any firm action, replaced by a vague promise of future evaluation, has led to a visible decline in investor confidence.
