Airtel likely to raise up to ₹5,000 crore via rupee bonds

Bharti Airtel is likely to raise up to ₹5,000 crore soon through rupee-denominated bonds from the local market as the Sunil Mittal-led telco seeks to refinance high-cost debt and fortify its balance sheet ahead of the 5G spectrum auction.

This will be part of the ₹7,500 crore fundraising plan announced by the company earlier this month. Besides this, India's second-largest telco is evaluating two other options - an offshore bond issue and a rupee loan from banks in the local market, said people familiar with the matter.

"The rupee-linked corporate bonds with multiple maturities may come with multiple tenors in range of three to 10 years," said a senior executive involved in local bond sales. A 10-year paper may be priced at 8-8.25%, the executive said.


One of the people said a possible dollar-bond floatation in offshore markets could only be in the latter part of the April-June quarter. The geopolitical uncertainties have sent global benchmark gauges higher, making such borrowings costlier.

Net Debt Nearly Stands at ₹1.6 L cr at Dec End
Earlier this month, Airtel said it would raise up to Rs 7,500 crore for refinancing through issuance of secured/unsecured, listed/unlisted non-convertible debt securities including debentures and bonds in one or more tranches.

An Airtel spokesperson declined to comment on ET's queries on the mode of debt fundraising.

The company's shares fell 0.4% to close at Rs 709.80 on the BSE Monday. Airtel's net debt nearly stood at Rs 1.6 lakh crore at December end compared with Rs 1.66 lakh crore at end of September.

Last September, Crisil Ratings had upgraded its long-term rating on Bharti Airtel's bank loan facilities and debt programme to AA+/stable from AA/stable, reflecting an improvement in the telco's operating metrics. The ratings firm said it expects a further improvement in the company's overall credit risk profile in the near-to-medium term on the back of improving cash accruals helped by tariff hikes.

The mobile carrier's latest fundraising plan comes shortly after US tech giant Google said last month that it would invest up to $1 billion in Bharti Airtel. Google will invest $700 million for 1.28% stake in the telco and the balance $300 million over five years towards commercial pacts to make smartphones affordable to drive 4G upgrades and also jointly develop network domain 5G use cases.

A few months ago, Airtel floated a Rs 21,000-crore rights issue, proceeds of which will also be used to spruce up its balance sheet by cutting debt and also prepare for the upcoming 5G spectrum auction planned in April-May.

Airtel has so far raised around Rs 5,247 crore in the first tranche of the rights issue and the remaining amount will be garnered once it decides to make the two additional calls.