Airtel's Nxtra gambles on pre-revenue data center acquisitions

Market pulse

From the investor's mind

CIE Automotive India specializes in manufacturing complex components for original equipment manufacturers (OEMs), focusing on capabilities like forging, casting, stamping, and machining rather than branded products. Kumar Saurabh highlights that the company's expertise lies in producing these foundational vehicle parts. This business model means that while consumers may not recognize a CIE Automotive India product, the company is a critical supplier within the automotive industry. The investor's point is that this behind-the-scenes role, centered on manufacturing capability, is key to understanding the company's value.

Word in the street

Bharti Airtel Limited

Even as Bharti Airtel’s stock has remained relatively steady, with a 3.22 percent gain over the last year, a debate has emerged among investors regarding the future of its data center arm, Nxtra. With a market capitalization of around 1,222,424 crore, the telecom giant is a formidable presence. The conversation centers on Nxtra's plans to acquire businesses that are yet to begin commercial operations, prompting questions about its capital expenditure strategy. Some observers have pointed out that Airtel has been diluting its stake in the subsidiary. One view is that even significant growth in Nxtra's valuation might not substantially affect its parent company, given the scale of Airtel's primary operations.

Yesterday's big moves

“He who lives by the crystal ball will eat shattered glass.”

Ray Dalio