Airtel board approves proposal to raise ₹21k cr
Funds will help the telco expand network, pay dues, take on rival Jio
Bharti Airtel Ltd’s board approved a proposal to raise as much as ₹21,000 crore by selling stocks to existing shareholders, as the telecom operator seeks to expand its network amid intense competition with Reliance Jio Infocomm Ltd. The board fixed the sale price for the rights issue at ₹535 apiece, with 25% of the amount to be paid on application and the balance in two more tranches, based on the company’s requirements, within 36 months, Bharti Airtel said in stock exchange filings on Sunday. Shareholders will be eligible to buy one share for every 14 held. On Friday, shares of Bharti Airtel rose 1.21% to ₹593.95 on BSE. The fundraising will help the company bolster its balance sheet to invest in building a fifth-generation, or 5G, telecom network, strengthen its existing network to compete with Reliance Jio and pay adjusted gross revenue-related (AGR) liabilities, among other dues. Airtel did not say how it will use the proceeds of the share sale.
MUMBAI: Bharti Airtel Ltd’s board approved a proposal to raise as much as ₹21,000 crore by selling stocks to existing shareholders, as the telecom operator seeks to expand its network amid intense competition with Reliance Jio Infocomm Ltd.
The board fixed the sale price for the rights issue at ₹535 apiece, with 25% of the amount to be paid on application and the balance in two more tranches, based on the company’s requirements, within 36 months, Bharti Airtel said in stock exchange filings on Sunday. Shareholders will be eligible to buy one share for every 14 held.
The fundraising will help the company bolster its balance sheet to invest in building a fifthgeneration, or 5G, telecom network, strengthen its existing network to compete with Reliance Jio and pay adjusted gross revenue-related (AGR) liabilities, among other dues. Airtel did not say how it will use the proceeds of the share sale.
On Sunday, the company’s board also reviewed the industry scenario, business environment and the financial and business strategy of the company.
Bharti Airtel last raised ₹25,000 crore through a rights offering in May 2019. In February this year, it raised $1.25 billion by selling debt instruments to overseas investors ahead of a planned spectrum auction in March. Earlier this month, it raised ₹1,005 crore by transferring its ‘right to use’ of 800MHZ spectrum in three circles to Reliance Jio, which also assumed future liabilities of ₹469.3 crore related to the spectrum.
The promoter and promoter group of Bharti Airtel will collectively subscribe to the full extent of their aggregate rights entitlement, the company said. “In addition, they will also subscribe to any unsubscribed shares in the issue,” it added.
Bharti Airtel’s promoter group led by Sunil Mittal owns a 55.86% stake in the company. That means the promoter group will have to bring in more than half of the funds proposed to be raised through the rights issue.
The fundraising plans come at a time rival Vodafone Idea Ltd has been struggling to raise funds to meet its debt obligations, including AGR dues. Vodafone Idea announced plans to raise up to ₹25,000 crore through a mix of equity and debt but has yet to raise the funds.