Airtel looking to raise $1B from Investments Banks via Overseas Bonds

In an exchange filing on Monday, Airtel announced that they were to meet investors as soon as today, the 23rd. There are 6 or more fixed income investment banks such as JP Morgan Chase, HSBC, Standard Chartered Bank, Bank of America, Barclays and Citigroup. The teleco is supposed to meet with with the reps from the investment banks to discuss when and how the bonds will be launched.

The Details of the Investment in Airtel

The transaction is expected to go through via two sets of instruments. It could be either perpetual bonds or general senior overseas notes. The final decision on the same will be made some time after the meeting between the parties has been done. The bonds will be raised by the Mauritius arm of Airtel - Network i2i, with guarantee from the former.

Why Airtel Needs Cash?

The Sunil Mittal-led telecom operator is preparing for the 4G auction, the 5G launch and pay their AGR dues. The teleco is the second largest in the country and has the largest share of active user base. The plans have been set in motion as the telecom operator registered a profit of upwards of 800 Crores in the quarter ending in December, after 6 quarters in the red on the bounce. The profits are attributed to the merger between Indus Towers and Bharti Infratel and Airtel's strong showing in the market.

Another key reason for this fundraiser is in preparation for the inevitable launch of 5G service in India. Airtel have already shown they are capable - it has already tested 5G network on 4G airwaves to expedite the launch. The teleco has one eye on the upcoming spectrum auctions as well and the cash injection might just give them the edge. One more reason is that the teleco owes Center some INR 260 Billion in AGR dues as well.