Bharti Telecom sells 2.75% stake in Airtel to rid debt

The parent company of India's leading telecom operator, Bharti Telecom has sold 2.75% stake in Airtel to institutional investors in the secondary market, raising over Rs 8,433 crore.

Bharti Telecom has raised about Rs 8,433 crores (USD 1.15 billion) through an accelerated book-build offering of equity shares of Bharti Airtel.

Bharti Telecom will utilize the sale proceeds to repay debt to make the promoter holding company a 'debt-free company'.

Bharti Telecom holds a 38.8% stake in Airtel and it sold 152 M shares in a block deal to retire the debt of more than Rs 8,400 Cr, which was taken to fund two stake purchases in November 2017 & May 2019.

The block deal involving 2.75% stake sale would be conducted at around ₹558 per share. Stock market experts indicate that the shares were sold at a time when the Airtel stock was at an all-time high, which was analyzed as an added bonus.

Analysts also indicate that Airtel's Average Revenue Per User (ARPU) for Q4 2020 was ₹154 as compared to ₹123 a year ago - a 14% increase.

Bharti Group and Singtel will continue to hold a majority stake in Bharti Airtel at 56.23% after the transaction, said the company statement.

The allocation was done to over 50 accounts with the top 10 getting two-third of it, Bharti Telecom said in the statement.