Bharti Airtel promoter to sell shares worth $1bn
Bharti Telecom may sell a 2.75% stake at a floor price of ₹558/share
NEWDELHI: The promoter of Bharti Airtel Ltd will sell shares worth $1 billion in the mobile operator through a block deal on Tuesday, two people said, requesting anonymity.
The promoter, Bharti Telecom Ltd, will sell a 2.75% stake in the company at a floor price of ₹558 per share, the first person said. The floor price is at a discount of around 6% to Bharti Airtel’s stock price. On Friday, the company’s shares ended at ₹593.20 on the NSE, falling 0.27% from the previous day’s close. Monday was a market holiday.
“This will help in cleaning up debt and, post-deal, debt will be zero at the promoter level. This debt was taken to buy a stake in Airtel,” the second person said, adding that the stake sale will also create capacity at Bharti Telecom for further capital or shareholder support for the operator.
The sale will also improve Bharti Airtel’s ratings, he added. The block deal of around 150 million shares will be conducted by Jpmorgan India Pvt. Ltd as the promoter’s sole placement agent for the secondary market sale.
Post-deal, the stake held by Bharti Airtel promoters—bharti Telecom, Indian Continent Investment Ltd, Viridian Ltd and Pastel Ltd—will fall from the existing 58.98% to 56.23%, according to information on the NSE website. “The stock price has risen significantly recently, and most investors’ outlook on the stock is also positive. So, this may be a good time to sell,” an analyst with a domestic brokerage said on condition of anonymity.
Over the last three years, Bharti Airtel had been aggressively raising funds through rights issues, qualified institutional placements (QIPS) and issue of foreign currency bonds, among others, for its working capital requirements amid a brutal tariff war in the Indian telecom sector.
In May 2019, the firm had raised ₹25,000 crore through a rights issue and another ₹7,000 crore through a foreign currency perpetual bond issue.