As telecom operators in the country scramble to raise funds to function in the competitive market, India’s second largest mobile services provider Bharti Airtel said its biggest rights issue of Rs 25,000 crore will open on May 3 and close on May 17.
In a regulatory filing on Friday, Bharti Airtel said its board of directors approved rights issue in a meeting. Airtel announced rights issue to raise up to Rs 25,000 crore through issuance of fully paid-up shares at a price of Rs 220 per share, and additional Rs 7,000 crore through a foreign currency perpetual bond issue.
The company said the capital infusion will help it continue investments in future roll-outs to build large network capacity and create content and technology partnerships to ensure the strong customer experience.
“Last date for receiving request for split application form (is) May 10, 2019,” the filing said. Bharti Airtel has already fixed April 24 as the ‘record date’ to determine shareholders’ eligibility to apply for the equity shares. Last month, Airtel received commitment from its single-largest shareholder Singtel, promoters, and GIC Singapore to participate in the Rs 32,000-crore capital raising programme.
Singapore telecom major SingTel said it will infuse Rs 3,750 crore in Bharti Airtel by subscribing to the proposed Rs 25,000-crore rights issue of the company, while GIC Pvt Ltd, on behalf of Singapore government and the Monetary Authority of Singapore, has made a commitment of Rs 5,000 crore in the proposed programme.
Bharti Airtel’s rights issue comes after last month’s Vodafone Idea’s rights issue. Promoter shareholders — Vodafone Group and Aditya Birla Group — participated for an amount of up to Rs 20,000 crore in Vodafone’s rights issue, while the shares of Malaysia’s Axiata Group Berhad, which had renounced its entitlement in the Vodafone Idea rights issue, were picked up by some institutional investors. Axiata used to hold nearly 8.2 per cent stake in Vodafone Idea.
Vodafone Idea’s Rs 25,000-crore rights issue opened on April 10 at a price of Rs 12.50 per equity share and ended on April 25. The fund raise was part of India’s largest telecom operator’s efforts to reduce debt and garner funds for future capex spends.
However, as there was a concern about breaching the 75 per cent promoter shareholding limit, the company had taken permission from markets regulator Sebi to increase its promoter participation in the rights issue. The fund-raising move by Vodafone Idea, which was first indicated by the company when it announced its July-September 2018 quarter earnings, came at a time when the company needed to pare its high net debt of Rs 1.15 lakh crore as on December 31, 2018.