Infusion Of Rs. 25,000 Crore Not Enough For Bharti
S&P Global Ratings on Wednesday said Bharti Airtel’s proposed rights issue of up to Rs. 25,000 crore is not enough to stabilize its credit rating.
The rating agency said that there is a negative outlook, an indication of rating downgrade, which means renewed competition and higher capital spending by the company would keep its debt level up.
Shoring up leverage
“S&P Global Ratings believes the proposed rights issue (of Rs. 25,000 crore), if successful, would go a long way in restoring Bharti’s balance sheet and shoring up leverage. However, the negative outlook on the rating captures the risk of renewed competition and elevated capital spending by Bharti, which may keep the leverage elevated,” the rating agency said. The rating headroom remains limited despite the sizable equity infusion, it noted.
Bharti, last week, approved fund-raising of up to Rs. 32,000 crore through rights issue and bonds — a move that will help the company take on market competition intensified by Reliance Jio and cut debt.―The Hindu
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