Singtel to pick 7.39% stake in Bharti Telecom for $659 million

NEW DELHI: Bharti Airtel’s stock gained over two per cent after major shareholder Singapore Telecommunications ( Singtel) said it plans to increase its holding in the telco’s parent Bharti Telecom by 7.39% for around $659 million (around Rs4,400 crore), thus raising its effective stake in India’s largest carrier.

Singtel said it will buy the stake in unlisted Bharti Telecom from Singapore government-owned sovereign wealth fund Temasek to increase its holding to 46.39%. This will effectively increase its direct and indirect stake in Airtel, India’s No. 1 telecom operator, to over 36% from nearly 33% currently. Singtel is already the single largest shareholder in Bharti Airtel.

Shares of Bharti Airtel rose 2.43% intraday, before closing at Rs352.40, up by 2.07% on the Bombay Stock Exchange, outperforming the benchmark index. Airtel’s market capitalisation rose by Rs2,858.14 crore to Rs1,40,868.38 crore. Bharti Airtel declined to comment.

Bharti Telecom holds 45.09% in the Sunil Mittalowned Bharti Airtel. The Mittal family owns 51% stake in Bharti Telecom while Singtel, before Thursday’s deal, held 39% stake. In a statement, Singtel said it will acquire Temasek's 7.39% stake in Bharti Telecom along with another 21% stake in Thai telecom firm Intouch Holdings PCL for a total of 2.47 billion Singapore dollar ($1.8 billion).

Singtel will fund the deals though a fresh share issue to Temasek totalling S$1.605 billion, and shortterm debt. All three transactions need to close simultaneously, Singtel said. “The acquisitions are in line with the Group’s long-term strategy to increase its exposure to high-performing associates in its portfolio of leading telecom businesses in the region,” Singtel said. “Thailand and India are fundamentally attractive markets which are reaping the benefits of rapidly increasing smartphone penetration and mobile data adoption by a growing middle class.”