New Delhi, Aug 29: The board of telecom operator Bharti Airtel on Sunday approved raising up to Rs 21,000 crore through rights issue, at a price of Rs 535 per share, according to a regulatory filing. Mega is bound to deliver more firepower for fundraising Airtel, as the company takes on rivals in fiercely-competitive Indian telecom market.
India, which is the world’s second largest telecom market and largest data consumer, is now gearing up for 5G, which will significantly enhance connectivity pipes, provide ultra-high-speed and new-age applications for users. will enable, and players to, new revenue streams. Airtel’s board, which met to consider the company’s capital raising plan, approved a rights issue price of Rs 535 per equity share with a premium of Rs 535 per equity share.
In a BSE filing, Airtel said that “…the Board has approved issuance of equity shares of face value of Rs. of issue size up to Rs 21,000 crore”. The rights entitlement ratio includes one equity share for every 14 equity shares held by eligible shareholders as on the record date.
Airtel said the terms of payment of the issue price, 25 per cent on application and the balance amount in two more additional calls are envisaged as per the requirement of the company within the overall time-horizon of 36 months by the Board or its committee. can be determined by “The Promoter and the Promoter Group of the Company shall collectively subscribe to the full extent of their aggregate rights of entitlement,” it said.
The company said that “they will also subscribe to any unsubscribed shares in the issue. The promoter’s stake in the company is approximately 55.8 per cent, while the public’s share is 44.09 per cent.”
Airtel’s board has constituted a ‘Special Committee of Directors’ to decide the terms and conditions, including the issue period and the record date. In the meeting, the board of directors reviewed the company’s industry scenario, business environment, financial and business strategy and approved further capital raising plans, Airtel said.
Simply put, a rights issue is an offer to existing shareholders to buy additional new shares in a company. Shares of Airtel closed at Rs 593.95 on Friday, which is 1.21 per cent higher than the previous close.
In its note last week, Jefferies had said that any capital raised by Bharti Airtel, which aims to increase capacity in anticipation of a larger market share from Vodafone Idea, could be viewed as “positive”. Sunil Mittal-led Bharti Airtel is the second largest telco in the world. Airtel added 38.1 lakh wireless subscribers in June, taking its mobile user base to 352 million, according to the recently released customer data by the three private market players and the telecom regulator.
Reliance Jio, which is consolidating its lead, gained 54.6 million users in June as its mobile subscriber base rose to 436 million during the month. In a fundraising spree last year, Jio Platforms, which houses India’s smallest but largest telecoms firm Jio and Apps, raised around Rs 1,00,000 from marquee investors including Facebook, Google, General Atlantic, KKR, Mubadala, ADIA, TPG, 52,056 crore was raised. Intel Capital, Qualcomm Ventures and others.
Vodafone Idea Limited (VIL), the third operator in the sector, is struggling to stay afloat and analysts have sounded the alarm over the potential risk of turning the market into a monopoly. Vodafone Idea lost nearly 42.8 lakh customers during June, and its user base shrunk to 273 million, reeling from the existential crisis of the debt-ridden telco.
Recently, billionaire Kumar Mangalam Birla stepped down as the chairman of Vodafone Idea Ltd within two months of the government offering to hand over Aditya Birla Group’s stake in the telco, to avert a crisis for the telecom giant. VIL’s total gross debt (excluding lease liabilities and including interest but not outstanding) as on June 30, 2021 was Rs 1,91,590 crore, which included deferred spectrum payment obligation of Rs 1,06,010 crore and an adjusted gross revenue. AGR) has a liability of Rs 62,180 crore which is the government’s.
Industry body COAI has urged the government for fiscal reforms in the telecom sector, making a strong pitch for cutting levies, doubling the tenure of auctioned Radiowave Holdings as well as a 7-10 year moratorium for spectrum payments, To address feasibility concerns. While there is no official word yet on specific relief measures, sources said the government believes that there should be “good competition” for the orderly growth of the telecom sector. It is committed to serve larger social objectives such as consumer interest and online. He said that education and e-learning through a strong digital and communication infrastructure in the country.
According to the data of the Ministry of Communications, while the total AGR dues of various telecom companies (both private and state-owned telcos) is Rs 1,69,048.65 crore, the total payment received so far is Rs 30,283.59 crore, and about Rs 1,38,765 crore is due. For Bharti Airtel Group, which had a total outstanding of Rs 43,980 crore, payment of Rs 18,004 crore has been received, while Rs 25,976 crore is due.
Last year, the Supreme Court had said that telecom companies will have to pay 10 per cent of the total dues by March 31, 2021, while the dues are to be paid in annual installments from April 1, 2021 to March. 31, 2031, payable by 31st March of each subsequent financial year.
.
read all breaking news, breaking news And coronavirus news Here
.