Bharti Telecom To Buy 3.33 Per Cent Stake From Singtel For Rs 12,895 Crore

Bharti Airtel promoter Bharti Telecom will buy a 3.33 percent Airtel stake from Singtel for 2.25 billion Singapore dollars or about Rs 12,895 crore in 90 days, the telecom operator said on Thursday.

Bharti Group chairman Sunil Bharti Mittal's family and Singtel are co-investors in Bharti Telecom (BTL).

Singtel in a statement said that after the transaction, Singtel Group is expected to own an effective stake of 29.7 percent in Bharti Airtel, which is estimated to be worth SGD 22 billion (about Rs 1.26 lakh crore).

''After this inter-se transaction, Bharti Telecom will remain the principal vehicle to hold controlling shares in Airtel. Bharti Enterprises and Singtel to work towards equalizing their effective stake in Airtel over time,'' Mittal said.

The share purchase is expected to be completed over 90 days.

Singtel at present holds a 50.56 percent stake in Bharti Telecom and the Mittalfamily holds 49.44 percent.

Bharti Telecom at present holds a 35.85 percent stake in the country's second-largest telecom service provider Bharti Airtel.

''Singtel and its affiliates have agreed to transfer approximately 3.33 percent shares to BTL for an aggregate amount of approximately 2.25 billion Singapore dollars (SGD), leaving direct shareholding of Singtel and Bharti in Airtel at around 10 percent and 6 percent respectively,'' Bharti Airtel said in a regulatory filing on Thursday.

''Bharti and Singtel have agreed to work towards equalizing their stake in Airtelover some time,'' the filing said.

The transaction is expected to crystalize an estimated net gain of SGD 0.6 billion, about Rs 3,439 crore, on divestment for Singtel.

Singtel chief financial officer Arthur Lang said that as long-term strategic investors and partners, the value of Singtel's stake in regional associates has risen substantially over the years but has not been properly reflected in the company's share price.

''The sale in Airtel will be our first ever and seeks to address this gap by illuminating the sizable value of our shareholding in Airtel. It is also part of our capital management approach to take monetization opportunities that allow us to increase our return on invested capital and enhance total shareholders returns,'' Lang said.

Singtel said that the transaction will follow several capital management initiatives to rebalance and optimize Singtel's associate's portfolio including an increase in Intouch Holdings, the parent company of Singtel's regional associate AIS and partial divestment of Airtel Africa.

Singtel plans to invest SGD 2.25 billion raised from this transaction into 5G services and growth initiatives in the next few years, Lang added.

Bharti Airtel has posted an over a five-fold jump in its consolidated profit to Rs 1,607 crore for the quarter ended June 2022, mainly on account of a hike in tariffs. The company had posted a profit of Rs 283.5 crore in the same period a year ago.

Consolidated revenue from operations of Bharti Airtel increased by about 22 percent to Rs 32,805 crore during the reported quarter from Rs 26,854 crore earlier.

Bharti Airtel's total customer base grew by 4.7 percent on a year-on-year basis to 49.69 crores, with India accounting for 36.24 crore subscribers.

(This story has been published from a wire agency feed without any modifications to the text. Only the headline has been changed.)