Bharti Telecom (BTL), a key promoter company of Bharti Airtel, plans to raise up to ₹6,000 crore of debt via non-convertible debentures (NCDs) to buy the balance portion of the 3.33% stake that Singapore Telecommunications (Singtel) will sell in the Indian telco.
The proposed rupee-linked NCDs are likely to be subscribed primarily by top foreign portfolio investors (FPIs), three people aware of the matter said. Some local institutional investors may also participate, they added.
Last week, Singtel sold 1.76% in Airtel through block deals for a little over ₹7,100 crore. Bulk of that stake – around 1.62% – was acquired by BTL for ₹6,604 crore, while the balance (0.14%) was acquired by public shareholders in Airtel. BTL is now raising fresh debt to part-finance the remaining 1.57% stake buy from Singtel, one of the people cited told ET.
Banks Involved
BNP Paribas, HSBC, Japan’s MUFG and Standard Chartered Bank among others are likely helping BTL to raise the money via rupee-linked NCDs.
“Overseas lenders’ foreign portfolio units are likely to subscribe to the NCDs,” said an executive directly involved in the exercise. The NCDs are expected to be of shorter duration between one and three year maturities.
At press time, queries to BTL and Airtel did not elicit a response. Individual banks didn’t comment either. Airtel shares closed 0.45% higher on the BSE Monday.
Analysts said the Bharti Group has to raise debt to fund the Singtel stake purchase as the southeast Asian carrier recently ruled out any fresh equity infusion in BTL. The Mittals of Bharti Enterprises and Singtel own 50.56% and 49.44%, respectively, in BTL, which in turn, owns a shade over 37% in Bharti Airtel.
Last month, Singtel had said it would sell a 3.33% stake in Airtel to BTL for $1.61 billion (about ₹12,900 crore) – over a 90-day period – as it looks to boost shareholder returns and increase returns on invested capital. Singtel and Sunil Mittal’s Bharti Enterprises are also working towards equalising their effective shareholdings in Airtel over time.