Bharti Telecom stake in Airtel comes down to 41.24% after renouncement of shares, rights issue

New Delhi: Stake of Airtel promoter group firm Bharti Telecom has come down to 41.24 percent following renouncement of 11.34 crore shares by the entity valued at around Rs 3,920 crore and Rs 25,000-crore rights issue, according to the updated shareholding of the company. Sunil Bharti Mittal family and Singapore telecom firm Singtel-owned firm Bharti Telecom held 50.1 percent stake with 211.62 shares in Bharti Airtel at the end of March 2019. Bharti Telecom shareholding dropped to Rs 200.28 crore in May disclosure by Bharti Airtel. According to sources, Bharti Telecom renounced shares for the Singapore government and the Monetary Authority of Singapore and foreign-based promoter group firm Indian Continent Investment Limited (ICIL). [caption id=“attachment_4546351” align=“alignleft” width=“380”]  Representational image. Reuters.[/caption] However, it cannot be ascertained the exact number of shares that Bharti Airtel transacted to the entities GIC Pvt Ltd, on behalf of the Government of Singapore and the Monetary Authority of Singapore, has made a commitment of Rs 5,000 crore during the rights issue programme. At the time of the Rs 25,000-crore rights issue, the company allocated shares for Rs 220 a unit. The Singapore government entities now jointly hold over 24.73 crore shares. Based on the stock closing price of Rs 345.65 a unit on the BSE on Tuesday, the value of shares allocated to Singapore government entities now stands at around Rs 8,550 crore and accounts for 4.82 percent stake in the Indian telecom firm. ICIL holding in Airtel increased 25 crore shares, valued at around Rs 8,651 crore based on stock closing price, to 33.14 crore units in May from 8.11 crore at the end of March 2019.

Responding to an e-mail query, Bharti Airtel said, “As stated in our letter of offer, the promoter group amongst themselves, have subscribed to their aggregate entitlement except to the extent of 227,272,727 shares renounced in favour of GIC Private Limited. Bharti Telecom Limited and Indian Continent Investment are part of the promoter group.”

Airtel had announced the rights issue to raise up to Rs 25,000 crore through issuance of fully paid-up shares at a price of Rs 220 per share, and additional Rs 7,000 crore through a foreign currency perpetual bond issue. It opened on 3 May and closed on 17 May, 2019. While the offer price was fixed at Rs 220 per share, the Bharti Airtel scrip ended at Rs 328.20 apiece on the BSE, 0.84 percent higher than the previous close, on the day the rights issue closed. Earlier this month, Bharti Airtel reported a surprise 29 percent surge in the March quarter net profit as exceptional income gains and Africa business helped offset losses in India mobile services operations. The company, whose profitability has been battered by intense price competition posed by richest Indian Mukesh Ambani’s Reliance Jio, earned a net profit of Rs 107.2 crore in January-March as against Rs 82.9 crore it earned in the same period of the previous fiscal. This marked the first rise in profit after several quarters for the company. Its revenue soared 6.2 percent to Rs 20,602.2 crore for the three months ended 31 March 2019.