Bharti Airtel board approves up to Rs 21,000 crore fundraising via rights issue
The Bharti Airtel board on Sunday approved a rights issue to raise up to Rs 21,000 crore from the shareholders.
The shares will be offered at Rs 535 apiece, including a premium of Rs 530. Bharti shareholders will have 1 fully paid-up equity share of the company for every 14 shares held by them.
The company’s board of directors at its meeting comprehensively reviewed the industry scenario, business environment, financial, business strategy of the company and approved the plan to raise further capital.
“Accordingly, the board approved the issuance of equity shares of face value of Rs 5 each of the company on a 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 telecom operator said in an exchange filing.
On Friday, the telco’s scrip on the BSE closed 1.21 per cent higher at Rs 593.95.
“Further, the board has constituted a ‘specialcommittee of directors’ to decide the other terms and conditions of the issue, including the issue period and the record date,” the telco said in a regulatory filing to the bourses.
Bharti Airtel’s promoter and promoter group will collectively subscribe to the full extent of their aggregate rights entitlement and will also subscribe to any unsubscribed shares in the issue, the telecom player said.
The promoter holding in the company stands at about 55.8 per cent, while the public holds 44.09 per cent.
Airtel will receive the money from the shareholders in tranches. The company said, “25 per cent on application and balance in two more additional calls as may be decided by the board/ committee of the board from time to time based on the company’s requirements within an overall time-horizon of 36 months”.
The latest move is expected to give more firepower to Airtel as the company takes on rivals in the fiercely competitive Indian telecom market that is now gearing up for 5G.
In its note last week, Jefferies had said that any capital raising by Bharti Airtel that aims to enhance its capacity in anticipation of large market share shifts from Vodafone Idea Limited could be seen “positively”.
Jio Platforms, which houses Reliance Jio, had raised about Rs 1,52,056 crore from marquee investors last year, including Facebook, Google, General Atlantic, KKR, Mubadala, ADIA, TPG, Intel Capital and Qualcomm Ventures.
Vodafone Idea Ltd, the third operator in the sector, is struggling to stay afloat and analysts have sounded an alarm over the potential risk of the market turning into a duopoly.