Pandey said Centrum values the company at around ₹12 lakh crore, while the public issue could be priced at a modest discount to that valuation. He added that the listing could support valuations across the telecom sector.
“For the sector… it can try re-rating of Indian telcos,” Pandey said, though he added that the impact would depend on the IPO’s pricing and investor response.
Centrum On Airtel’s Hike
Pandey also expects the larger prepaid segment to drive the next leg of revenue and average revenue per user (ARPU) growth for telecom operators.
Furthermore, on Bharti Airtel’s decision to raise postpaid tariffs, he said that this hike could be the first step towards broader price increases across the telecom sector, with prepaid tariff hikes likely over the next three to five months, according to Piyush Pandey, Senior Vice President at Centrum India.
Pandey said Airtel’s postpaid business contributes around 10-12% of its wireless revenue, limiting the immediate financial impact of the latest tariff revision.
“Postpaid contributes around 10 to 12% of total wireless revenue,” he said, adding that the latest increase could lift Airtel’s overall revenue by around 1% sequentially once it is fully reflected in earnings.
However, he said the market is looking beyond postpaid pricing.
“We can expect close to 10 to 12% increase in prepaid plans, and that might happen over the next three to five months,” Pandey said.According to him, a prepaid tariff hike would have a more meaningful impact on ARPU because prepaid subscribers account for the bulk of telecom revenues.
“That is definitely which can move the needle in terms of ARPU,” he said.
Pandey expects rival operators to follow Airtel’s pricing actions. While postpaid contributes only a small share of Reliance Jio’s revenue, he said Vodafone Idea could benefit more if it implements similar tariff increases, given that postpaid accounts for about 12-13% of its revenue mix.
For the full interview, watch the accompanying video
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