Singtel sells stake worth ₹5,849 cr in Airtel to Rajiv Jain's GQG

Singaporean telecommunications conglomerate Singtel on Thursday said it has divested another 0.8% stake in Sunil Mittal-led Bharti Airtel to U.S.-based investment firm GQG Partners. The value of the transaction is S$0.95 billion (or ₹5,885 crore). In 2022, Singtel sold 3.3% shares in Airtel for approximately S$2.54 billion (Singapore dollar).

Reacting to the news, shares of Bharti Airtel rose as much as 1.6% to hit a fresh 52-week high of ₹1,213.05 on the BSE. The counter witnessed a spurt in volume trade as 11.5 lakh shares changed hands over the counter as compared to the two-week average of 6.15 lakh stocks, while the market capitalisation rose to ₹6.77 lakh crore. The telecom heavyweight has risen 64% against its 52-week low of ₹738.7 touched on March 29, 2023.

Singtel has been a strategic investor in Airtel, one of the world’s top three mobile operators with over 500 million customers in 17 countries, for more than 20 years. After the transaction, Singtel will hold an effective stake of 29% in Airtel, worth an estimated S$33 billion.

Singtel in a release says that the stake in Airtel is the latest in the Singtel Group's capital recycling efforts to unlock value from its assets, bringing the total capital recycled to S$8 billion since its strategic reset in 2021.

“This has allowed the Group to fund the growth of its data centre and IT services, as well as reduce net debt by S$3.2 billion as of end September 2023. The Group has also returned S$0.8 billion in special dividends to shareholders from capital recycling, contributing to cumulative dividends of S$5.2 billion paid out to shareholders since April 2022,” the release notes.

"We're pleased to have raised S$0.95 billion, while adding a marquee name to Airtel’s share base. The Group is now in an even stronger position to execute our disciplined capital approach of balancing investing for greater growth and delivering strong, sustainable returns for our shareholders,” says Arthur Lang, Singtel Group CFO.

“Airtel continues to see steady growth across all its businesses and has been rewarded with strong market valuations. We believe there’s more room for growth given India’s accelerated digital transformation and we intend to stay invested for the long term while working with Bharti Enterprises to equalise our effective stake in Airtel over time,” he adds.

Rajiv Jain's GQG Partners, which made headlines last year by buying a stake in Adani group companies despite Hindenburg Research's allegations against the conglomerate, is betting big on India and recently picked up stakes in various companies such as ITC, JSW Energy, Patanjali Foods, and HDFC Bank.

In January this year, the investment management firm increased its stake in cigarette-to-soap maker ITC to 2.79%. The two funds associated with GQG Partners - Goldman Sachs GQG Partners International Opportunities Fund and GQG Partners Emerging Markets Equity Fund together held 2.79% stake in FMCG major ITC as of December quarter of FY24, compared to 1.58% at the end of September quarter.

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