Singtel sells 1.76% in Airtel via block deals for Rs 7000 crore

Singapore Telecommunications, commonly known as Singtel, is believed to have sold around 1.76% stake in Bharti Airtel through block deals, aggregating to around Rs 7,148 crore. Bulk of these shares have been acquired by Bharti Telecom Ltd (BTL), a key promoter company of the Indian telco.

According to NSE block deal data, Pastel Ltd, a Singtel affiliate, sold 93.1 million shares—or 1.58% of Airtel's equity—in the Indian telco at Rs 687.31 a piece to BTL, aggregating Rs 6,399 crore. Industry insiders aware, though, said Viridian Ltd, another Singtel affiliate, also sold over 10 million shares in Airtel. Assuming the Viridian block deal was done at the same price, the shares were sold for around Rs 750 crore. Singtel is believed to have offloaded a total 104 million Airtel shares in the market on Wednesday.

Block deal data, though, shows that BTL bought a total 96.2 million shares in Airtel for Rs 6,604 crore. The balance 7.8 million shares were acquired the public, which in turn, has marginally boosted the public holding in the Sunil Mittal-led telco, people aware of the matter said.

Last month, Singtel had said it would sell a 3.33% stake in Airtel to BTL for $1.61 billion (about Rs 12,900 crore)—over 90 days—as it looks to boost shareholder returns and increase return on invested capital. Singtel and Sunil Mittal's Bharti Enterprises had also said they would work towards equalising their effective shareholdings in Airtel over time.

Wednesday’s block deals are believed to be the first tranche of Singtel’s targeted 3.33% stake sale in Airtel, the people cited said.

After Wednesday’s block deals, promoter company BTL’s stake in Airtel has risen to a shade over 37% from 35.4%. Singtel’s effective stake in Airtel, in turn, stands reduced to a shade below 30% from 31.4%, a person aware of the development told ET. The public holding in Airtel is believed to have risen from 44.74% to 44.87%, following today's block deals.

At press time, queries to Bharti Airtel, BTL and Singtel remained unanswered.

Airtel shares fell 3.3% intraday before recovering some ground to close 1.08% lower at Rs 753.05 on BSE on Wednesday.

Earlier, BTL had said that Bharti and Singtel had decided to make directional shifts in their respective holdings in Airtel, which would pave the way for the Airtel’s controlling company to further strengthen its shareholding in India’s second-largest telco.

After Singtel concludes its targeted 3.33% stake sale in Airtel, BTL will eventually own 38.75% in the Indian telco. The Mittals and Singtel will continue to own 50.56% and 49.44% respectively in BTL, which won’t change after the deal. Airtel’s promoter group holding—comprising the Mittal family and SingTel—will also remain at around 55.3%.

Singtel’s effective holding in Airtel, though, will drop to 29.7%, comprising a 19.2% indirect stake through BTL and a 10.5% direct stake.

After the 3.33% stake sale by Singtel, the Mittal family’s effective stake in Airtel—direct and through BTL—will rise to 25.6% from the current 23.9% level.