Bharti Telecom to sell $1 bn stake in Airtel through block deal

Bharti Telecom is selling up to USD 1 billion of its shares in Bharti Airtel through a secondary market block deal on Tuesday.

Bharti Telecom is the holding company of Bharti Airtel. Bharti Telecom holds 38.79 per cent equity stake in Bharti Airtel which will reduce by upto 2.75 per cent after the block deal. The total promoter shareholding as per exchange data is listed at 58.98 per cent.

Singapore Telecom is a strategic partner with Bharti Airtel, J P Morgan is the placement agent for the transaction. This will be a 100 per cent secondary market placement through an accelerated book-build offering of equity shares.

The floor price is Rs 558 per equity share at a 6% discount to the close price of Rs 593.20 as on May 22 on the National Stock Exchange.

The deal size will be around USD 1 billion for up to 150 million equity shares comprising up to 2.75 per cent of total shares outstanding as of March 31, 2020.

The seller in the transaction is Bharti Telecom Limited and will include a lock up condition of no intention to sell for 90 days from the seller.

No guidance will be given on pricing until the equity shares are crossed on the stock exchange on May 26, 2020. Investors should indicate the demand sensitivities across the price range.

There is no assurance that any order for the equity shares will be met in part or full, principally due to the operational mechanics of the Indian stock exchanges.

The allocation of the equity shares to foreign portfolio investors is subject to the headroom available for acquisition of equity shares of the company by such investors as per the investment limits prescribed under applicable Indian laws.

The books will close by evening today while the trade day is tomorrow and the settlement date is May 28.

Bharti Airtel is a fancied stock at the moment and is among the top institutional holdings of FPIs, mutual funds and insurance companies. Its current market cap is Rs 3.23 lakh crore.