India: Airtel promoter sells 2.75% stake to Societe Generale and others

Photo: Bloomberg

Bharti Telecom Ltd, the promoter of Bharti Airtel Ltd, has sold a 2.75% stake in the telecom operator for a total of 8,433 crore, or $1.15 billion, to foreign institutional investors (FIIs) and some domestic mutual funds, said a person with knowledge of the matter.

The FIIs that took part include Societe Generale, Blackrock, Norges Bank and Fidelity Investments, while domestic mutual funds that participated included Axis Mutual Fund, HDFC Mutual Fund, SBI Mutual Fund and ICICI Prudential Mutual Fund, the person said, requesting anonymity.

Societe Generale took 35.3 million shares, accounting for a 0.6% stake, according to the bulk deals data on BSE website. The amount of shares bought by other investors could not be ascertained immediately.

Bharti Telecom sold a total of 150 million shares in Airtel at a weighted average price of 562.22 per share, while Societe Generale bought the shares at 561.10 apiece, as per information on the BSE.

Shares of Airtel fell nearly 6% on BSE to close at 559.15 each. Queries emailed to Airtel remained unanswered at the time of publishing.

Bharti Telecom, owned jointly by Sunil Mittal and his family as well as Singapore-based Singtel, said the allocation was done to over 50 accounts, with the top 10 subscribers getting two-thirds of the overall allocation.

The stake sale was anchored by several existing and new shareholders, which included marquee global mutual funds, sovereign wealth funds, multi-strategy funds and domestic institutional investors, Bharti Telecom said. The promoter stake sale was aimed at cleaning up the debt from its books and, post-deal, debt is expected to be zero at the promoter level, which in turn will create capacity at Bharti Telecom for further capital or shareholder support for Airtel.

“With the proceeds, Bharti Telecom Limited will become a zero debt company providing an even stronger financial flexibility and capacity to provide any additional shareholder support as may be desired by Bharti Airtel from time to time,” Bharti Enterprises group director Harjeet Kohli said in a statement. In the last few years, the promoters of Airtel have invested over 21,000 crore in the operator. Analysts agreed, as IIFL Securities said that the sale will help the promoter company cut its debt of 8,500 crore.

The article was first published on livemint.com

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.