Singtel offloads 1.5% stake in Airtel for ₹7,262 cr

Pastel Ltd, a unit of Singapore-based Singapore Telecommunications, has sold a 1.59% stake in Bharti Airtel for ₹7,262 crore via an open market transaction. The stake sale decision by the Singtel subsidiary is part of its plan to raise over S$2 billion, which will help it meet the needs for 5G and expansion initiatives.

Bharti Airtel's promoter firm Bharti Telecom Ltd, which is also a joint venture between Bharti Enterprises and Singtel, has bought the stake from Pastel, the National Stock Exchange (NSE) data shows. The shares were offloaded at an average price of ₹772.5 apiece, amounting to a total value of ₹7,261.50 crore.

The current transaction reduces Pastel's shareholding in Bharti Airtel to 10.62% from 12.21% earlier. At the end of the June quarter of FY23, Pastel's stake in Bharti Airtel was 13.84%.

Both Singtel and the Sunil Mittal family have decided to work towards equalising their stake in Airtel over a period of time. Bharti Telecom is aiming to calibrate and spread such acquisitions to maintain a comfortable level of leverage. The stake sale is expected to be executed anytime before November 23, 2022.

Last month, Bharti Telecom had raised its shareholding in Airtel by acquiring a 3.33% stake from Singtel and its affiliates for about SGD 2.25 billion ($1.61 billion or ₹12,895 crore). Bharti Telecom is jointly owned by Bharti Group chairman Sunil Bharti Mittal's family and Singtel.

The Singtel Group owned an effective stake of 29.7% in Airtel as of August 2022, which is estimated to be worth S$22 billion. This comprised a 19.2% indirect stake through Bharti Telecom and a 10.5% direct stake.

According to Arthur Lang, Singtel's group chief financial officer says the value of its stakes in regional associates has risen substantially over the years but has not been properly reflected in its share price. "The sale in Airtel will be its first-ever and will address this gap by illuminating the sizeable value of our holdings in Airtel," he had said last month.

Apart from India, Airtel runs operations across 16 countries in Africa. The company is gearing up to launch 5G services in India soon, starting with key cities.

The Bharti Airtel stock is down 0.62% today at Rs 779.20 on the NSE. The stock has gained 5.53% in the past month; 10.53% in the past six months; and 12.71% in the year-to-date period.

Separately, Bharti Airtel and Meta-owned WhatsApp on Thursday launched their first ever “Airtel IQ” hackathon to build new-age business solutions using the WhatsApp Business Platform across five key sectors -- e-commerce, ed-tech, banking and financial services (BFSI), travel and tourism, contact centre operations.

Airtel IQ Hackathon offers prizes worth up to Rs 1 crore, business mentorship from leaders at Airtel and WhatsApp across product, engineering and business functions along with training engagements and learning modules on the WhatsApp Business Platform.