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