Airtel board approves Rs 21K cr rights issue as 5G clash beckons

Telecom operator Bharti Airtel's board on Sunday approved raising up to Rs 21,000 crore by way of rights issue, at a price of Rs 535 per share, according to a regulatory filing.

The mega fundraising is bound to give more firepower to Airtel, as the company takes on rivals in the fiercely-competitive Indian telecom market.

India, which is the world's second-largest telecom market and the biggest data consumer, is now gearing up for 5G that will significantly scale up connectivity pipes, enabling ultra-high-speeds and new-age applications for users, and new revenue streams for players.

Airtel's board, which met to consider the company's capital raising plans, cleared rights issue price of Rs 535 per fully paidup equity share, including premium of Rs 530 per equity share.

In a BSE filing, Airtel said that the "...board approved the issuance of equity shares of face value of Rs 5 each of the company on rights basis to eligible equity shareholders of the company as on the record date (to be notified later), of an issue size of up to Rs 21,000 crore".

The rights entitlement ratio entails one equity share for every 14 equity shares held by eligible shareholders as on the record date.

The terms of payment of issue price, envisage 25 per cent on application and balance in two

more additional calls as may be decided by the board or its committee based on the company's requirements within an overall time-horizon of 36 months, Airtel said.

"The promoter and promoter group of the company would collectively subscribe to the full extent of their aggregate rights entitlement," it said.

The company added that "they will also subscribe to any unsubscribed shares in the issue".

Promoter holding in the company stands at about 55.8 per cent, while public holds 44.09 per cent.

The board of Airtel has constituted a 'Special Committee of Directors' to decide the other terms and conditions of the issue including issue period and the record date.

The board of directors at the meeting reviewed the industry scenario, business environment, financial and business strategy of the company and approved the plan to raise further capital.