Parent of Singtel associate Bharti Airtel seeks $1.4b from share placement

Bharti Airtel shares climbed to 598.8 rupees after it posted a 14 per cent increase in user revenue in the quarter through March. PHOTO: REUTERS

MUMBAI (BLOOMBERG) - The parent of Bharti Airtel Ltd, a Singtel associate, is seeking about US$1 billion (S$1.42 billion) by selling a stake in the Indian mobile carrier after its share price hit a record on signs the years-long price war is about to end.

Bharti Telecom Ltd is selling 150 million Bharti Airtel shares at a floor price of 558 rupees (S$10.47) each, according to terms of the deal obtained by Bloomberg. That implies a discount of about 6 per cent to its close on Friday (May 22).

Bharti Airtel shares climbed to a record 598.8 rupees last week after it posted a 14 per cent increase in user revenue in the quarter through March. Investors have been betting the worst is behind the New Delhi-based operator as it faces fewer competitors than in the recent past.

The entry of billionaire Mukesh Ambani's Reliance Jio Infocomm in 2016 accelerated a consolidation in the market with a billion-plus subscribers - second only to China, forcing some to merge and a few to drop out. The shake-up has left Jio and Vodafone Idea as Bharti Airtel's only non-state rivals.

The deal is one of the largest follow-on offerings in India this year, data compiled by Bloomberg show. Bharti Airtel raised US$3 billion in January from the sale of shares and convertible bonds to help pay additional airwave and license fees after telecom operators lost a court case.

Singtel lst week said it will recognise its share of Bharti Airtel's provision for a one-time spectrum charge at $357 million, or $232 million on a post-tax basis. The Singapore telco is due to announce its fourth quarter and full year financial results on May 28.

This comes as its Indian associate accounted for an exceptional charge of 56.4 billion rupees (S$1.1 billion), based on reassessed regulatory costs related to the spectrum charge, Singtel said in a bourse filing.

Join ST's Telegram channel and get the latest breaking news delivered to you.