Bharti Airtel, India’s second largest telco, has said its board will meet on August 29 to consider and approve raising funds via equity, equity linked or debt instruments or a combination.
Analysts say the carrier’s latest move is likely aimed at meeting its adjusted gross revenue (AGR) and spectrum dues totalling nearly Rs 13,000 crore coming up for payment in the first half of 2022. They added that the fund raising will further strengthen Airtel's balance sheet, and combined with a financially strong Reliance Jio, will add to the woes of cash-strapped Vodafone Idea, who could cede revenue and subscriber market share even faster.
“We wish to inform you that a meeting of the board of directors of the company is scheduled on Sunday, August 29, 2021, to inter-alia consider various capital raising options through equity or equity linked or debt instruments or any combination there-of, as the board may deem appropriate,” Airtel said in a notice to the stock exchanges on Wednesday.
The notice came after market hours. Shares of the telco closed 1.2% lower at Rs 612.45 on the BSE Wednesday, giving it a market cap of Rs 3.36 lakh crore.
The carrier’s stock hit an all-time intra-day high of Rs 644 on August 16, on a positive outlook. Analysts said its fiscal first quarter results reflected healthy 4G additions, revenue mix improvement, highest-ever home broadband subscriber additions and healthy free cash flow (FCF) generation, as well as consistent subscriber and revenue market share gains.
Most brokerages have a ‘Buy’ rating on the stock. CLSA, for example, has a target price of Rs 730, Goldman Sachs has one of Rs 675 and Jefferies Rs 685.
Bharti Chairman Sunil Mittal in June said that Airtel, with nearly 351 million mobile phone, broadband and DTH subscribers in India, has already raised $12 billion in the past 24 months. But "...one can never say never to raising fresh capital, (though) there is nothing immediately” in the pipeline.
"Bharti's latest fundraise plans appear to be triggered by upcoming AGR (adjusted gross revenue) and spectrum payment obligations, even though the company is profitable,” said an analyst at leading global brokerage, who did not wish to be named.
He said that there is a perception that the Airtel stock is attractively priced, and thus, the telco could do a quick fundraise via a private placement to strategic investors. “But then markets tend to be more comfortable with funding via debt instruments and are wary of equity dilutions".
The company’s net debt increased at June-end to around Rs 1.6 lakh crore from around Rs 1.5 lakh crore in the previous quarter, and its net debt to Ebidta ratio was at around three times, deemed ‘comfortable’ by industry analysts.
Goldman Sachs estimates Airtel needs to pay Rs 4,100 crore in AGR dues by March 2022, and also has spectrum payments worth Rs 8,500 crore coming up in FY23. Besides, Airtel needs to aggressively keep investing in expanding and deepening its 4G network as it is involved in a bitter fight with rival Reliance Jio for financially struggling Vodafone Idea’s subscribers.
It added that the telco is likely to face “an annual cash shortfall of at least Rs 2,000 crore ($270 million) if tariffs stay at current levels,” in FY23.
The carrier also needs to financially prepare for the next auctions—likely in early 2022—which will involve the sale of 5G airwaves, followed by rolling out of the next gen services.
Brokerage Motilal Oswal estimates that capital expenditure required for 5G network roll out pan-India including spectrum, sites and fibre will be Rs 1.3 lakh crore-2.3 lakh crore, of which Rs 78,800 crore-Rs 1.3 lakh crore is expected for metro cities and ‘A’ circles.
The fund raising comes with the Bharti Group in the process of restructuring its digital and telecom assets, to be able to create more monetizable opportunities.
Under the new corporate structure, Bharti Airtel will hold all digital assets, while the telecom businesses is being hived off into a newly-created unit, Airtel Ltd, which will be a wholly-owned subsidiary under the umbrella company Bharti Airtel. Airtel Payments bank and Airtel’s international and infrastructure business including Airtel Africa and Indus Towers and Nxtra will be the other two units under the umbrella company.
FAQs
"A meeting of the board of directors of the company is scheduled on Sunday, August 29, 2021, to inter-alia consider various capital raising options through equity or equity-linked or debt instruments or any combination thereof, as the board may deem appropriate," Bharti Airtel said in a BSE filing.
What are the growth prospects of Airtel? ›
Macquarie expects Airtel's India ARPU to reach Rs 275 per month in FY27, driven by a likely 15 percent rise in industry tariffs post the general elections this week, followed by ongoing mix improvements - data users, upgrades to 5G, strategic segmentation, and prepaid to postpaid conversions.
Who is the CEO of Airtel? ›
Gopal Vittal (born 1967) is an Indian business executive. He is the Chief Executive Officer (CEO) of Bharti Airtel (India) and South Asia, an Indian multinational telecommunications services company with operations in 20 countries.
What is the plan of Airtel growth? ›
Bharti Airtel, India's second-largest telecom operator by market share, is expected to witness a 38% increase in its average revenue per user (ARPU) to Rs 286 over the next three years, according to analysts.
What is the net worth of Airtel in rupees? ›
Similarly, Airtel's net worth has risen to Rs 86,260 crore as on December 31, 2023, from Rs 75,886 crore in the last auction.
What is the highest salary in Airtel? ›
The highest-paying job at Bharti Airtel is a Senior Vice President with a salary of ₹102.9 Lakhs per year. The top 10% of employees earn more than ₹20 lakhs per year. The top 1% earn more than a whopping ₹48.16 lakhs per year.
Is it good to invest in Airtel? ›
As of 21st March 2024, the share price of Airtel has reached ₹1242/share. Bharti Airtel shares have performed very well in the past couple of years. In the last year, Bharti Airtel shares gave a 62% return, which is nearly double that of the Indian benchmark index Nifty 50, which gave a return of nearly 30% last year.
Who is the daughter of Airtel owner? ›
Meet Eiesha Bharti Pasricha, Sunil Bharti Mittal's only daughter; Know about her business, lifestyle, family, net worth, and more - Lifestyle News | The Financial Express.
What is the previous name of Airtel? ›
At the time it was purchased by Zain in April 2005, Celtel had about 24 million subscribers in 14 African countries. On 8 June 2010 the company was purchased by Bharti Airtel from Zain. On 22 November 2010, it was rebranded as 'Airtel'.
Who is the CFO of Airtel? ›
Soumen Ray - Bharti Airtel | LinkedIn.
It uses a B2C model to derive income from its customers and a B2B model, registered under Airtel Business that helps startups and SMEs. Airtel stands out with its unique business model that aims to provide the customers with the best services at competitive prices.
Why Airtel is successful in India? ›
The company's success story is a testament to its unwavering commitment to innovation, customer-centricity, and adaptability in the face of ever-changing market dynamics. In 1984, Sunil Bharti Mittal, the visionary founder of Bharti Airtel, recognized the immense potential of the telecommunications sector in India.
What are the 4Ps of Airtel? ›
Marketing Strategy of Airtel analyzes the brand with the marketing mix framework which covers the 4Ps (Product, Price, Place, Promotion). These business strategies, based on Airtel marketing mix, help the brand succeed in the market.
Who is the real owner of Airtel? ›
Sunil Bharti Mittal (born 23 October 1957) is an Indian billionaire businessman and philanthropist. He is the founder and chairman of Bharti Enterprises, which has diversified interests in telecom, insurance, real estate, education, malls, hospitality, Agri and food besides other ventures.
Is Airtel a profit or loss? ›
In financial year 2023, Bharti Airtel Limited reported a net profit of about 83 billion Indian rupees, up from loss of over 150 billion rupees in financial year 2021. Bharti Airtel offers its customers home and digital TV services along with its widely popular mobile services.
Who is the king of Airtel? ›
Airtel founder Sunil Mittal becomes first Indian to be knighted by Britain's King Charles III. The Knight Commander of the Most Excellent Order of the British Empire, conferred for a preeminent contribution in any field of activity, is awarded in an honorary capacity to foreign nationals.
What is the future prediction of Bharti Airtel? ›
Future Growth
Bharti Airtel is forecast to grow earnings and revenue by 35.7% and 10.5% per annum respectively. EPS is expected to grow by 43.8% per annum. Return on equity is forecast to be 26.7% in 3 years.
What will be Airtel share in 2030? ›
Key Takeaways from Forecasted Price for BHARTIARTL from 2024 to 2030
| Year | Initial Target | Mid-Year Target |
|---|
| 2027 | ₹1835 | ₹1725 |
| 2028 | ₹2101 | ₹1975 |
| 2029 | ₹2403 | ₹2259 |
| 2030 | ₹2751 | ₹2586 |
3 more rowsStock price target for Bharti Airtel Limited BHARTIARTL are 1420.13 on downside and 1441.73 on upside.
What is the competitive advantage of Airtel? ›
Airtel's competitive position and assets allow it to offer extremely low prices to the consumers which help in reducing the threat of new entry, and also has a very low cross-price elasticity because of its ability to offer services, that can't be offered with the same level of performance by its competitors6.
