Airtel Payments Bank IPO: Airtel could ring in D-Street debut of Payments Bank, Data Centre arm soon

New Delhi: India’s capital markets could see telecom firm Bharti Airtel launch initial public offerings (IPOs) of two of its units- Airtel Payments Bank and data centre unit Nxtra-in the next few years, with the former driven by a regulatory mandate and the latter with a view to monetisation, said a senior company executive. Airtel Payments Bank, which started operations in 2017 and clocked a net profit of ₹18.5 crore on a revenue of about ₹700 crore in the third quarter of this financial year, is likely to be the first off the blocks as it needs to list within 10 years.

“We have some mandate, we have been net worth positive for some time. So, over the next couple of years, we should potentially see an IPO in the payments bank,” said the executive, who did not wish to be identified.

Next in line could be Nxtra, which currently serves all the hyperscalers as well as domestic companies. “It is an asset that we can divest or create an IPO or go down in our shareholding (in some years). Today we have around 75%, which can be divested.”

But for now, Bharti Airtel has big plans for Nxtra-24% owned by private equity firm Carlyle-for the next couple of years, with big-ticket investments planned in building data centre capacity and acquiring more land for the purpose.

Nxtra, which competes with the likes of Netmagic, CtrlS and STTelemedia, has 12% market share, and earned a profit of ₹231.8 crore on revenue of ₹1,826.6 crore for 2023-24.

“It’s a very fragmented market. There are many players, and we have got large plans over the next couple of years… we will continue to invest behind Nxtra right now,” the executive said.The company is looking to divest stake in Nxtra as the business model is very different from telecom. Bharti Airtel didn’t respond to ET’s emailed queries.

The company is also looking to “retool” its enterprise business- under Airtel Business-to exploit the growth potential in the market.