Bharti Airtel promoters to invest money in rights issue

Bharti Airtel promoters might have to invest money in the rights issue. The joint investment by both the promoters, Singtel and Mittal Family, might be something around Rs 11,730 crores. This amount is out of the Rs 21,000 crores rights issue that the company’s board has approved recently. Out of the Rs 11,730 crores, the promoters will need to pay 25% of the amount upfront. This would mean an amount of Rs 2,392 crores.

Bharti Airtel’s promoters, including the Singtel and Mittal family own 31.72% and 24.13% of the company, respectively. This equates to almost 56% of the company, and the rest is owned by the public.

As per the rules of the rights issue, subscribers will have to pay 25% of the amount upfront. The rest of the amount can be paid in two instalments in a span of 36 months. According to an ET Telecom report citing an analyst at a top global brokerage, Singtel and the Mittal family will contribute around Rs 6,661 crores and Rs 5,067 crores, respectively. Out of this amount, the promoters will have to pay 25% upfront which will mean an amount of Rs 1,665 crores and Rs 1,267 crores.

With the money raised from this rights issue, Bharti Airtel will be able to invest more in the 5G spectrum and equipment along with paying off dues in the future. Bharti Airtel shareholders will receive one rights issue share for every 14 shares they already hold. The shares of the rights issue will be priced at Rs 535 a unit.

The promoters have promised that any of the leftover parts of the rights issue will be subscribed by them. This puts the normal public investors in a good spot. The rights issue will open on October 5, 2021, and close on October 21, 2021. Bharti Airtel shares opened strong on Tuesday morning at Rs 684 and are now trading at Rs 693.15 at the time of writing. Telecomtalk