Airtel raises Rs 5247 cr in first tranche of Rs 21,000 cr rights issue

NEW DELHI: has raised Rs 5246.85 crore in the first tranche of its Rs 21,000-crore rights issue with its board clearing the allotment of 392,287,662 rights equity shares to eligible applicants, with Rs 133.75 paid on application. The balance amount of the issue is to be paid in two more additional calls as may be decided by India’s second-largest telco as part of the issue.

“Accordingly, pursuant to the aforesaid allotment, the paid-up equity share capital of the company has increased from Rs 27,460.14 million to 27,950.49 million, consisting of 5,492,027,268 fully paid-up equity shares of Rs. 5 each and 392,287,662 partly paid-up equity shares (Rs. 1.25 partly paid-up),” the carrier said in a statement to the stock exchanges Wednesday.

The rights issue, which opened for subscription on October 5 and closed on October 21, saw the likes of Lion Meadow Investment, Mirae Asset Large Cap Fund, EuroPacific Growth Fund, SBI Life Insurance, LIC, ICICI Prudential MF, SBI MF and Nippon MF bid for shares. The company had said that the issue had been subscribed approx. 1.44 times, “overbid by both the public and promoter/ promoter group”.

Airtel’s promoter group – the Mittal family and SingTel – hold nearly 56 per cent of the telco with the rest held by the public. The Mittal family, directly and indirectly, owns around 24.13 per cent while SingTel holds 31.72 per cent.

Subscribers to the issue needed to pay 25 per cent on application and the rest in two additional calls as may be decided by Airtel’s board, though within 36 months. Airtel shareholders will receive one share for every 14 held in the telco at Rs 535 a unit, implying a 7 per cent dilution.

The telco’s stock closed 0.9 per cent higher at Rs702.55 on the BSE Wednesday.

Some large global fund houses and private equity players including “Blackrock, Vanguard, and HSBC have renounced their rights entitlements (REs) and sold off their holdings at a decent premium”, a top industry executive aware of details had told ET.

The Sunil Mittal-led telco plans to use the issue proceeds to bolster its balance sheet and build a war chest to clear its statutory dues, expand 4G networks, and prepare for an upcoming 5G spectrum auction.

Airtel’s net debt at June end was around Rs 1.6 lakh crore, implying a net debt to Ebidta ratio of around three times, which was deemed “comfortable” by sectoral analysts.

This is Airtel’s second rights issue in just over two years. The telco had raised Rs 25,000 crore via a rights issue in May, 2019. Including that, the carrier has raised $9.8 billion via equity, debt, stake sales in units and assets sales in India and Africa.

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