SINGAPORE – Singtel said it is “supportive” of a potential listing of its data centre business in India to fund further expansion of its digital infrastructure business.
The telco was responding to questions from shareholders and the Securities Investors Association (Singapore), or SIAS, ahead of its annual general meeting on July 29.
In a filing with the Singapore Exchange on July 24, Singtel also answered questions on its capital management strategy and other matters.
In response to a question on the strategy and potential returns from Singtel’s 25 per cent stake in ST Telemedia Global Data Centres (STT GDC), the telco said it views the data centre giant as a strategic investment rather than a passive financial holding, and its minority stake is a “strategic choice”.
Singtel’s data centres in India are part of the STT GDC business, which the telco acquired as part of a consortium with global investment firm KKR for $13.8 billion in February. The transaction is expected to close in early part of the second half of 2026.
By investing in STT GDC, Singtel gains exposure to the digital infrastructure sector both regionally and globally.
As the investment will be equity-accounted, Singtel can benefit from STT GDC’s growth without including the company’s debt or financial results in its own consolidated accounts, it said.
Singtel added that this structure limits the impact on its earnings per share while retaining its growth potential, and also allows the telco to execute strategic actions in the future as the data centre sector continues to evolve.
This could entail a potential listing of STT GDC’s India business, which Singtel said would capitalise on “strong public market demand” for digital infrastructure and increase its valuation.
On its subsidiary Digital InfraCo’s data centre business Nxera, Singtel said it expects earnings to continue growing in financial year (FY) 2027 as its data centre in Tuas ramps up, with customers progressively commencing operations.
This will support the continuous growth of Nxera’s earnings before interest, taxes, depreciation and amortisation (EBITDA) to more than $300 million by the end of 2028.
A question was raised about Singtel’s ability to mitigate environmental damage, water scarcity and pressure on power supplies, among other adverse effects, as its pursues data centre growth.
Singtel replied that its recognises the concerns that have been raised globally around the impact of data centres on electricity networks, water resources and local communities.
“These are important issues that must be addressed, and we believe the long-term success of AI infrastructure depends on ensuring that people benefit from its development, not simply from the digital services it enables.”
The telco will work with governments, utilities and local partners from the earliest stages of development to identify the most appropriate energy and water solutions for each project, ensuring they align with local infrastructure plans and community needs.
It will also seek opportunities to invest in dedicated and lower-carbon energy solutions that complement existing energy infrastructure, expand overall system capacity and improve resilience.
Singtel’s capital management strategy
Singtel also fielded questions on its capital management strategy.
A shareholder asked how the telco determined its medium-term asset recycling target of $9 billion, and whether it would make adjustments according to changes in market conditions.
Singtel said that the asset recycling target is “dynamic rather than a fixed cap” and is already adaptable to changing conditions, as demonstrated in the telco previously raising its target from $6 billion to $9 billion in May 2025 as opportunities evolved.
Its asset recycling target reflects its “continued focus on active capital management and disciplined capital allocation” and is intended to provide financial flexibility to invest in future growth opportunities while supporting sustainable shareholder returns.
There were also questions on whether the telco would consider a share buyback directly from shareholders, and pay a higher dividend.
Singtel replied that since it launched its $2 billion value realisation share buyback programme in May 2025, it has purchased around $760 million worth of shares, amounting to 40 per cent of the programme, from the open market and subsequently cancelled them.
“Cancelling the shares reduces the total number of shares outstanding, which enhances earnings per share (EPS) and allows all remaining shareholders to benefit from a larger ownership interest in the company,” it said.
Upon full execution of the $2 billion buyback, on an adjusted basis and based on financial year 2026’s net underlying profit, this would lead to a permanent 3 per cent accretion in underlying EPS and puts Singtel on a higher EPS and dividends per share trajectory.
It added that open market share buybacks are conducted in accordance with the Singapore Exchange’s listing rules, with purchases capped at not more than 5 per cent above the average closing market price over the last five market days.
In response to a question on whether its performance share plan (PSP) will reduce overall shareholder value and affect the interests of minority shareholders, Singtel said the annual PSP grants are capped at 0.5 per cent of its total issued shares.
The PSP is a long-term incentive system designed to reward key executives and align their performance with shareholder interests through conditional share awards, performance criteria, and vesting periods.
Total outstanding PSP awards over the last three years represent around 0.3 per cent of Singtel’s issued shares, the telco said.
It noted that it has historically settled vested PSP awards using treasury shares acquired through share buybacks, rather than issuing new shares. Therefore existing shareholders’ ownership has not been diluted by PSP vesting.
Shares of Singtel closed July 24 at $4.39, down nearly 1.6 per cent.
