News Update

Airtel Board Approves ₹21,000 Cr Rights Issue

• ByAyushi Ray     |    August 30, 2021

Bharti Airtel board approves ₹21,000 cr rights issue, by selling stocks to existing shareholders, as the telecom operator seeks to expand its network amid intense competition with Reliance Jio Infocomm Ltd. The board fixed the sale price for the rights issue at ₹535 apiece, with 25% of the amount to be paid on application and the balance in two more tranches, based on the company’s requirements, within 36 months, Bharti Airtel said in stock exchange filings on Sunday. Shareholders will be eligible to buy one share for every 14 held. The fundraising will help the company bolster its balance sheet to invest in building a fifth-generation, or 5G, telecom network, strengthen its existing network to compete with Reliance Jio and pay adjusted gross revenue-related (AGR) liabilities, among other dues. Airtel did not say how it will use the proceeds of the share sale. On Sunday, the company’s board also reviewed the industry scenario, business environment and the financial and business strategy of the company.

Bharti Airtel last raised ₹25,000 crore through a rights offering in May 2019. In February this year, it raised $1.25 billion by selling debt instruments to overseas investors ahead of a planned spectrum auction in March. Earlier this month, it raised ₹1,005 crore by transferring its ‘right to use’ of 800MHz spectrum in three circles to Reliance Jio, which also assumed future liabilities of ₹469.3 crore related to the spectrum. The promoter and promoter group of Bharti Airtel will collectively subscribe to the full extent of their aggregate rights entitlement, the company said. “In addition, they will also subscribe to any unsubscribed shares in the issue,” it added. Bharti Airtel’s promoter group led by Sunil Mittal owns a 55.86% stake in the company. That means the promoter group will have to bring in more than half of the funds proposed to be raised through the rights issue.

 

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