Bharti Telecom Ltd, the promoter company of Bharti Airtel Ltd, sold a 2.75% stake in the mobile-phone operator for Rs 8,433 crore ($1.15 billion) as part of a plan to fully repay its debt.
The promoter company sold the stake to several existing and new shareholders including mutual funds, sovereign wealth funds, domestic institutional investors and hedge funds, Bharti Airtel said in a statement. It didn’t name any buyers.
However, French multinational bank Societe Generale bought 35.31 million shares, or a 0.65% stake, for Rs 1,981.24 crore ($262.41 million at current exchange rates), according to a separate stock-exchange disclosure.
Airtel said that its promoters, Bharti Group and Singapore’s Singtel, will remain majority shareholders in the company with a collective 56.23% ownership after the transaction.
“Bharti Group and Singtel, as Bharti Airtel’s largest shareholders, remain committed to the business and long-term prospects,” Airtel said.
Bharti Telecom will use the sale proceeds to fully repay its debt, which it had taken to buy Airtel’s shares in the past. Bharti Telecom becoming debt-free will be positive for Airtel, too, by improving its credit profile, it said.
JP Morgan India Pvt. Ltd acted as the sole placement agent for the secondary offering.
India’s telecom sector witnessed a massive churn after the entry of Reliance Jio Infocomm Ltd, owned by billionaire Mukesh Ambani, triggered a price war in 2016. The sector comprised more than 10 carriers at its peak. Today, India’s telecom sector comprises three players with two of them — Airtel and Vodafone Idea — facing debt worries.
Bharti Group, led by billionaire Sunil Bharti Mittal, has sold stakes and exited certain businesses not core to its operations to repay debt. It had even planned to list its Africa subsidiary on the London Stock Exchange to cut debt and expand its data and mobile money services across Africa.