Bharti Airtel says it has approved preferential allotment of 7.1 crore shares to Alphabet-owned Google International LLC for about 1.20% of the total post-issue stake. The shares, allotted at an issue price of ₹734 apiece, include a premium of ₹729 apiece.

Google will pump in $700 million to own a 1.2% stake but its overall investment will eventually rise up to $1 billion in Bharti Airtel. Up to $300 million more will be invested toward potential commercial agreements over the next five years.

The investment in Airtel is Google’s plan to scale its offerings in India's second-largest telecom operator and build a strong digital ecosystem for consumers. The deal is a part of Google for India Digitisation Fund.

"The 'special committee of directors for preferential allotment' of the company, at its meeting today, i.e. July 14, 2022, approved the allotment of 71,176,839 equity shares of the face value of ₹5/- each fully paid up, on preferential basis to Google International LLC (Google) at an issue price of ₹734/- per equity share (including a premium of ₹729 per equity share)," Bharti Airtel says in a stock exchange filing today.

According to the telco, Google will hold 1.20% of the total post-issue equity shares of the company (1.17% on a fully-diluted basis). "With this, the paid-up equity share capital of the company stands increased to ₹28,306,517,827.50 divided into 5,563,231,650 fully paid-up equity shares of ₹5 each and 392,287,662 partly- paid-up equity shares of ₹5 each (paid-up value ₹1.25 each)," says Airtel.

The Bharti Airtel stock reacted by closing 0.30% or 2 points down at ₹641.50 on the National Stock Exchange. The stock has risen up to 23.23% or 120.87 points, thanks to Airtel's steady recovery. However, the stock is down 7.25% in year-to-date, six months (11.03%), and past month (6%) periods.

Apart from Bharti Airtel, tech giant Google had also invested ₹33,737 crore for a 7.73% stake in Reliance Industries' Jio Platform, which owns Reliance Jio, India's biggest telecom operator.

Reliance Jio had a wireless subscriber base of 40.5 crore as of April 30, 2022, followed by Airtel at 36.1 crore and Vodafone Idea at 25.9 crore.

As part of the tie-up, the companies will focus on enabling affordable access to smartphones across price ranges and explore building on their existing partnerships to potentially co-create India-specific network domain use cases for 5G and other standards. Airtel, along with Reliance Jio, Vodafone Idea and Adani Networks, has applied for the upcoming 5G spectrum auction. The auction will see 72,097.85 MHz of spectrum going under the hammer.

The tie-up between Airtel and Google will also focus on growing the cloud ecosystem in India by helping accelerate the digital transformation journeys of small and medium businesses. Bharti Airtel recorded a consolidated net income of ₹2,008 crore for the January-March quarter. It posted a growth of 164.46% compared to ₹759.2 crore profit in the same quarter last year.

Follow us on Facebook, Twitter, YouTube & Instagram to never miss an update from Fortune India. To buy a copy, visit Amazon.