NEW DELHI: Sunil Mittal-led Bharti Airtel announced a mega Rs 21,000 crore fund raise by announcing a rights issue at a price of Rs 535 per share, the money coming in at a time when the company gears up for the launch of 5G services in India even as it looks to cut down its mammoth debt of Rs 1.6 lakh crore.
The funds are also expected to help Airtel add a healthy war chest as a possible collapse of rival Vodafone Idea may mean it could gain a large number of new subscribers, many of whom will also move over to market leader Reliance Jio. A large influx of customers – Vodafone Idea currently has nearly 27 crore users – would mean that Airtel needs to invest in capex and other infrastructure to meet the surge.
In a regulatory filing on Sunday, Airtel said its board approved the rights issue for “… 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% 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, adding that “they will also subscribe to any unsubscribed shares in the issue”.
Promoter holding in the company stands at about 55.8%, while public holds 44.09%.
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 telecom industry scenario, business environment, financial and business strategy of the company and approved the plan to raise further capital.
Shares of Airtel had closed at Rs 593.95 apiece on Friday, 1.21% higher than the previous close.
In its note last week, Jefferies had said that any capital raise by Bharti Airtel that aims to enhance capacity in anticipation of large market share shifts from Vodafone Idea could be seen “positively”.
Airtel, the second largest telco in India, added 38.1 lakh wireless subscribers in June, pushing up its mobile user base to 35.2 crore.
The funds are also expected to help Airtel add a healthy war chest as a possible collapse of rival Vodafone Idea may mean it could gain a large number of new subscribers, many of whom will also move over to market leader Reliance Jio. A large influx of customers – Vodafone Idea currently has nearly 27 crore users – would mean that Airtel needs to invest in capex and other infrastructure to meet the surge.
In a regulatory filing on Sunday, Airtel said its board approved the rights issue for “… 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% 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, adding that “they will also subscribe to any unsubscribed shares in the issue”.
Promoter holding in the company stands at about 55.8%, while public holds 44.09%.
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 telecom industry scenario, business environment, financial and business strategy of the company and approved the plan to raise further capital.
Shares of Airtel had closed at Rs 593.95 apiece on Friday, 1.21% higher than the previous close.
In its note last week, Jefferies had said that any capital raise by Bharti Airtel that aims to enhance capacity in anticipation of large market share shifts from Vodafone Idea could be seen “positively”.
Airtel, the second largest telco in India, added 38.1 lakh wireless subscribers in June, pushing up its mobile user base to 35.2 crore.
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