Singapore Telecommunications could maintain a 25 percent stake in the combined entity created as a result of a potential merger between India's Bharti Airtel and South Africa's MTN, Morgan Stanley said in a report on Wednesday.

"We do not expect the Bharti-MTN transaction to have material dilutive impact to SingTel's EPS (earnings per share)," analysts at the U.S. investment bank said.

"Indeed, if the Bharti-MTN transaction goes through and SingTel increases its stake in the new entity using debt (which is very likely), we see room for slight EPS enhancement."

SingTel, Southeast Asia's biggest phone firm, owns about 30.4 percent stake in Bharti Airtel, India's leading mobile operator.

SingTel has said in the past it will remain a significant shareholder after any deal, though some analysts have expressed concerns that its stake in the combined entity could fall below 20 percent.

Bharti Airtel's planned tie-up with South Africa's MTN faces scrutiny from regulators and politicians. It said on Tuesday the deal would comply with the laws in both countries and any required waivers would be sought when appropriate.

Bharti Airtel's statement came shortly after the Indian market regulator amended takeover regulations by bringing depositary receipt holders with voting rights on par with shareholders.

Morgan Stanley said the latest change in takeover regulations in India creates uncertainties about the deal, but if the transaction goes through, it expects SingTel could borrow to increase its stake in the combined entity.

SingTel could enhance its earnings-per-share compound annual growth rate (CAGR) by 200-300 basis points assuming a 25 percent stake in the new entity, the research report said.

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