Airtel’s Rights Issue Oversubscribed, Gets Industry Thumbs Up

Airtel Friday said its mega Rights Issue of Rs 25,000 crore has been over subscribed by the closure day. The issue was opened on 3 May and closed on 17 May.

“The Company would like to bring to your notice that, based on preliminary information received, the Rights Issue has been over-subscribed,” the company said in a statement.

Industry experts and financial analysts gives a thumbs up to the firm’s Rights issue.

“Attractive pricing decision by Bharti Airtel upfront is a rare decision in recent times and has proved to be very bold and investor friendly and reflects Bharti’s long term strategic view on the business and opportunities across space,” said an analyst who wished to remain unnamed.

“The applications received in the Rights Issue are subject to verification and clearing of payments, as applicable, and finalization of the basis of allotment,” it added in the statement.

Airtel’s share was offered to trade at Rs 220 apiece whereas by the end of the day it traded at Rs 328.20 per share. According to sources the company’s ex-rights price in the market continues to trade at a high premium to rights price.

Airtel had earlier announced to raise a total of Rs 32,000 crore to fund future plans, including Rs 25,000 crore ($3.5 Bn) via rights issue and Rs 7000 crore ($1 Bn) through a foreign currency perpetual bond. This makes it one of the largest Rights Issue in the country.

Airtel’s single largest shareholder and Singapore’s leading operator Singtel had earlier announced to infuse Rs 3750 crore and GIC, a Singapore government owned investment firm, had committed to pump in Rs 5,000 for the Rs 32,000 fund raise plan.

This fund, the company had said earlier, will be used for the firm’s readiness for the future including network upgradation, purchase of 5G spectrum and network gears and other similar requirements.

Once a country with more than 12 operators, India, at present has been shrunk to just four pan-India operators with three private operators and one PSU. Post Jio’s entry to the market, the market saw a big scale consolidation and operators including Bharti Airtel, Vodafone and Idea felt the pinch which led to merger between Vodafone and Idea.

The new company, Vodafone Idea, had also announced to raise Rs 25,000 crore via Rights issue last month which was 80% subscribed.

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