Air­tel hold­ing firm for Africa biz may go public

Hindustan Times (Delhi) - - INDIAUNSEEN - Navadha Pandey navadha.p@livemint.com

NEWDELHI: In­dia’s largest tele­com oper­a­tor Bharti Air­tel Ltd Wed­nes­day said its unit man­ag­ing its Africa op­er­a­tions is con­sid­er­ing a po­ten­tial ini­tial public of­fer­ing.

In a stock ex­change fil­ing, Bharti Air­tel said the board of Bharti Air­tel I nter­na­tional (Nether­lands) BV has au­tho­rized the man­age­ment to be­gin non-bind­ing ex­ploratory dis­cus­sions with banks and in­ter­me­di­aries to eval­u­ate the pos­si­bil­ity of a public list­ing.

“The above dis­cus­sions are at an ex­ploratory/pre­lim­i­nary stage and at this junc­ture, there is no cer­tainty of any fi­nal de­ci­sion or out­come,” the com­pany added. An­a­lysts be­lieve an IPO will mon­e­tise Bharti Air­tel’s Africa op­er­a­tions, at a time when it is en­gaged in a bruis­ing bat­tle with Re­liance Jio In­fo­comm Ltd in In­dia.

The com­pany, which is locked in a price war since the launch of Re­liance Jio in Septem­ber 2016, was hit hard when the tele­com reg­u­la­tor in Septem­ber de­cided to slash in­ter­con­nec­tion us­age charges levied by mo­bile net­works han­dling in­com­ing calls from ri­val net­works. As a re­sult, Bharti Air­tel’s quar­terly profit plunged 39% to ₹306 crore in the De­cem­ber quar­ter.

While rev­enues from In­dia op­er­a­tions fell 11.3% year on year to ₹15,294 crore, the per­for­mance of its Africa unit saved some blushes. In con­stant cur­rency terms, Africa rev­enues grew by 5.3% year on year to $783 mil­lion dur­ing the quar­ter com­pared with $744 mil­lion a year ago. This was largely led by strong growth in data and Air­tel money trans­ac­tion value.

“They have made Africa busi­ness prof­itable; so, the (com­pany’s) plan is to get value out of it. In most mar­kets in Africa, they are ei­ther num­ber one or num­ber two, so the valu­a­tion of Africa busi­ness will be at­trac­tive,” a Mum­bai-based an­a­lyst said on the con­di­tion of anonymity.

The com­pany’s ag­gre­gate cus­tomer base i n Africa too in­creased from 84.1 mil­lion as of De­cem­ber end from 76.9 mil­lion in the cor­re­spond­ing quar­ter last year, an in­crease of 9.4%. It of­fers 3G ser­vices and Air­tel Money across 14 coun­tries in Africa and 4G ser­vices in four coun­tries in the con­ti­nent.

“With sus­tained com­pet­i­tive pres­sure from Jio, Bharti Air­tel’s EBITDA is ex­pected to see fur­ther de­cline for the next few quar­ters. If their net debt to EBITDA ra­tio goes be­yond three times, it could risk the chance of a rat­ing down­grade. The valu­a­tion of Africa busi­ness may in­su­late the com­pany from a po­ten­tial rat­ing down­grade,” the an­a­lyst cited above said.

MINT/FILE

While rev­enues from In­dia op­er­a­tions fell 11.3% year­onyear to ₹15,294 crore, the per­for­mance of Air­tel’s Africa unit saved some blushes

REUTERS/FILE

Jet Air­ways to­tal in­come rose 6.9% to ₹6,349 crore from a year ago

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