Singtel will subscribe to new shares in Bharti Telecom - the holding company of Indian telecommunications company Bharti Airtel - under a proposed preferential allotment that will see it increase its stake in Bharti Telecom.

Singtel will be allotted up to 85.45 million new equity shares in Bharti Telecom at 310 rupees apiece, which will raise its stake by up to 1.7 per cent for a total consideration of around 26.5 billion rupees (S$545 million).

The allotment, expected to close by next month, will see Singtel's economic interest in Bharti Airtel increase by 0.9 percentage point to 39.5 per cent.

Singtel's total stake in Bharti Telecom will increase to 48.9 per cent with this current investment, according to a press statement by Bharti Airtel.

The funds raised will go towards debt reduction, it added.

Bharti Telecom holds around 50.1 per cent of Bharti Airtel, which has been a Singtel associate company since 2000.

Mr Arthur Lang, chief executive of Singtel's international group, said the move was an opportunity to deepen strategic ties with Bharti Airtel despite headwinds in India.

"We take a long-term view of our investment in Airtel, which continues to be a strong market leader in a region with rapidly increasing smartphone penetration and mobile data adoption," he added.

Singtel shares closed at $3.48 yesterday, down one cent.