Promoters to sell 2.75% in Bharti Airtel for $1 bn

Bharti Telecom, promoter of Bharti Airtel, is expected to raise $1 billion, or more than ~7,600 crore, by selling a small stake in the telecom giant.

The sale is expected to be through block deals on Tuesday on the stock exchanges, and is essentially to pare the promoter’s debt.

The move expands the list of promoters that have or are planning to sell stake in their companies. In the past one month, Reliance Industries has announced five deals, worth over ~78,500 crore and involving sales of small stakes in Jio Platforms, while Glaxosmithkline has raised ~25,480 crore by selling Hindustan Unilever shares.

It is learnt that Airtel will make an announcement regarding this on Tuesday. According to the details available with Business Standard,

Bharti Telecom will sell 150 million shares, equivalent to 2.75 per cent of its stake in Airtel, through an accelerated book-build offer. The floor price of each share has been fixed at ~558, a discount of 6 per cent over the last closing price of ~593.20 on May 22 on the NSE. Airtel’s rights issue was priced at ~220 per share.

Bharti Airtel declined to comment on the deal, which is being handled by J P Morgan India in the capacity of its sole lead banker.

Allocating equity shares to foreign portfolio investors is subject to investment limits under Indian law, sources said. The settlement date of the block deal is May 28.

Airtel’s rights issue, worth ~25,000 crore and to fund its 4G network expansion, came a year ago and today the promoters are estimated to make over ~5,000 crore from sales of these 150 million shares.

The stake sale comes at a time when Air tel’s op erations have improved, with reduc tion in debt. Airtel’s consolidated net debt, excluding lease obligations, stood at ~88,251 crore on March 31, down from ~1.082 trillion a year ago.