Singapore Telecom to invest fresh Rs2,649 cr in Bharti Airtel

Singapore Telecommunications Ltd (Singtel) will invest Rs2,649 crore in Bharti Telecom Ltd through a preferential allotment of shares to increase its stake in Bharti Airtel. The amount will be used for debt reduction by India's largest telecoms carrier.

"Singtel International Investments will be allotted up to 85,450,000 new equity shares in Bharti Telecom at an issue price of INR310 per equity share," Singtel said in a statement today.

Bharti Airtel shares rose in early trade. Its scrip was up 2.4 per cent at Rs431.70 after touching an intraday high of Rs436.70 on the BSE this morning amid weak broader markets.

With this investment through its wholly-owned subsidiary, Singtel and its affiliates' total stake in Bharti Telecom will increase to 48.90 per cent from 47.17 per cent. Consequently, Singtel's economic interest in Bharti Airtel will rise by 0.9 percentage points to 39.5 per cent.

The transaction, which is subject to the shareholders' approval of Bharti Telecom, is expected to be completed by March 2018. The Sunil Mittal-led Bharti Enterprises continues to hold over 50 per cent stake in Bharti Telecom.

In a separate statement, Deven Khanna, managing director, Bharti Telecom, said, ''The fresh round of investment highlights the confidence of Singtel in Airtel, and the increased attractiveness of the Indian telecoms sector following the recent consolidation.''

The investment comes within 23 months of Singtel's participation in Bharti Telecom's right issue of Rs2,500 crore, which was completed in February 2016.

''This is a good opportunity for us to deepen our strategic partnership with Airtel. While there are currently headwinds in India, we take a long-term view of our investment in Airtel which continues to be a strong market leader in a region with rapidly increasing smartphone penetration and mobile data adoption,'' said Arthur Lang, chief executive - international at Singel.

As of December 2017, Airtel's consolidated debt stood at Rs91,714 crore.