Qatar has picked up 5 per cent stake in Bharti Airtel for $1.26 billion (Rs 6,796 crore). The deal has been routed through Qatar Foundation Endowment (QFE), an investment vehicle of the Qatar Foundation controlled by Sheikha Mozah, the second wife of the country’s Emir.
Bharti will issue 19.9 crore new shares to the Foundation at Rs 340/share. The company’s shares were trading at Rs 317.7, up 0.30 per cent, at close on Friday on the Bombay Stock Exchange.
The deal indicates that foreign investors still see the Indian telecom sector as an attractive destination despite the regulatory uncertainties. “This strategic partnership with QFE demonstrates the confidence they have in the company and our strategy for growth,” said Sunil Bharti Mittal, Chairman, Bharti.
Rashid Al-Naimi, Acting Chief Executive Officer, QFE, said this was a long-term investment. Bharti plans to use the proceeds to repay debt. Post the deal, the promoter group’s stake will fall from 68.55 per cent to 65.12 per cent. “Our calculations suggest that the share issue will be largely neutral on EPS (earnings per share) estimates. The transaction will aid in strengthening the balance-sheet of Bharti Airtel with net debt to reduce from Rs 63,800 crore to Rs 57,000 crore.” Shobhit Khare VP-Research, Motilal Oswal Securities Ltd, said.
Bharti had recently raised $1.5 billion via overseas bonds. It is also looking to sell up to 25 per cent stake in its DTH business.