Airtel’s subsidiary Bharati Hexacom likely to raise Rs 1,500 cr

Bharati Hexacom, a subsidiary of India‘s second largest telco Bharti Airtel, is raising up to Rs 1,500 crore via local bonds, said local investment bankers.

Coming at the beginning of the year, this fundraising could well mark revival in investor sentiment, which had turned negative on phone companies.

The bonds will likely offer 6 percent with about three-year maturity. The papers will mature in January 2024.

While a possible use for the funds could be a long-delayed buy back of state-run TCIL‘s 30% stake in the company, a person familiar with the telco’s plans said it was for “general corporate purposes”.

“After an interval we could see a telco tapping the local debt market, which could well be a bilateral deal,” one of the persons cited told ET.

Bharti Hexacom and TCIL did not immediately respond to ET’s query.

Rating company CRISIL graded those bonds as AA with stable outlook.

“Bharti Hexacom will continue to benefit from its strong operational and financial linkages with Bharti Airtel and high financial flexibility it derives from the parentage,” it said in a rating report.

Bharti Hexacom accounted for about 8% of Bharti Airtel’s total subscriber base as on September 30 last year, show data from TRAI, the telecommunication regulator. The company provides flagship wireless services under the Airtel brand in Rajasthan and the Northeast.

Government-backed TCIL has extended its telecom consultancy and turnkey projects execution services to telecom operators, bulk users and others in India and 80 other countries in Middle East, Africa, South & South East Asia.

Corporates raised a record around Rs 7.67 lakh crore via local bond sales in 2020, partly helped by the liquidity measures by the RBI that aided high rated companies to reduce their cost of borrowing along with smaller ones.

This is the highest ever sum in a calendar year as companies mopped up Rs 7,66,781 crore during the 12-month period, which is about 12 percent higher than the previous year, ET reported on January 5. Thebusinessnews