Tag: Bharti Airtel

Sunil Mittal overtakes Lakshmi Mittal in net worth as Airtel stock hits new high

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A 70% rally in shares of Bharti Airtel over the last year has taken billionaire Sunil Mittal’s net worth to $19.7 billion. In the process, the founder and chairman of Bharti Enterprises has not only entered into the top ten wealthiest people in the country but also surpassed the fortune of steel tycoon Lakshmi Mittal.

While the fortune of Sunil Mittal & family surged $3.8 billion since January 2024, Lakshmi Mittal witnessed an erosion of nearly $1 billion in his wealth during the same period. According to the Bloomberg Billionaires Index, Sunil Mittal, who possessed 13th rank at the beginning of the year, also surpassed developer KP Singh’s net worth and Kumar Birla of Aditya Birla Group.

Source: Bloomberg

The majority of Mittal’s fortune is derived from his 28% stake in Bharti Airtel. His stake is held through closely-held Bharti Enterprises and other holding companies. Apart from Bharti Airtel, the promoter also held 70% of the newly listed mobile services provider Bharti Hexacom. In contrast, the stock of ArcelorMittal has come off 11.4% in the last year after analysts foresee muted demand rebound in many of its core markets.

Also Read: Tata Group in talks to buy Pegatron’s iPhone operations as soon as May

Lakshmi Mittal is chairman and largest shareholder of ArcelorMittal, the world’s biggest steelmaker outside of China. The Luxembourg-based company has mining, energy and refining operations in 59 countries. The company reported a net revenue of $68.3 billion in 2023, whereas its profit for the year stood at $ 919 million.

With a market capitalisation of $91.84 billion (including partly paid-up shares), Bharti Airtel is ranked fourth after Reliance Industries, TCS and HDFC Bank. Further, its newly listed subsidiary –Bharti Hexacom—had a valuation of close to $6 billion as of Friday’s close.

Analysts at Jefferies expect Bharti Hexacom to deliver 16% and 21% annualised growth in revenue and earnings before interest taxes and depreciation (EBITDA) over FY24-27. The brokerage, which initiated coverage with a “Buy” rating on the stock observed, “ It offers a way to invest in those parts of Bharti Airtel’s business that are growing faster.”

Also Read: ICICI Bank to consider raising funds via debt securities

Shares of Bharti Airtel surged to a new high of ₹1296.50 on the NSE in Friday’s trade.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bharti Airtel at lifetime high on deal with Dialog Axiata to merge Sri Lanka operations

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bharti Airtel Ltd shares gained more than 5% on Thursday after the company announced entering into a definitive agreement with Dialog Axiata PLC and Axiata Group Berhad to merge their operations in Sri Lanka.

The leading telecom operator informed the stock exchanges that, as per the agreement, the three entities will combine their operations in the island nation.

As per the deal, Dialog will acquire a 100% stake in Airtel Lanka. Dialog will issue ordinary voting shares to Bharti Airtel, up to 10.355% of the total issued shares to Dialog via a share swap transaction.

“The transaction is subject to the approval of Dialog’s shareholders and is pending the completion of specific conditions outlined in the Share Sale Agreement, including clearance from the Colombo Stock Exchange (CSE) and completion of other applicable legal, corporate and regulatory compliance procedures,” Bharti Airtel said in a release dated April 18.

The Telecommunications Regulatory Commission of Sri Lanka (TRCSL) has already granted its approval for the merger plan, the telco informed the stock exchanges.

Dialog Axiata PLC is a subsidiary of Axiata Group Berhad, which is one of the leading Quad-play connectivity providers in Sri Lanka. The telco has the largest FDI in Sri Lanka with a total investment of around $3.25 billion.

#JustIN | Dialog Axiata, Axiata Group & #BhartiAirtel sign a definitive agreement to combine their ops in Sri Lanka

Dialog will acquire 100% of the issued shares in Airtel Lanka

Dialog will issue to Bharti Airtel, ordinary voting shares which will amount to 10.355% equity of… pic.twitter.com/4WbZewbabW

— CNBC-TV18 (@CNBCTV18Live) April 18, 2024

On the other hand, Airtel Sri Lanka has been the fastest growing telecom services provider in the country reaching 1 million customers while it started its operations in 2009.

This merger is expected to help achieve economies of scale, which in turn can boost the capital expenditure in this sector leading to high-speed broadband connectivity, voice and value added services, operational betterment, and most importantly, it can help in saving cost by reducing infrastructure duplication.

Ashish Chandra, Chief Executive Officer, Bharti Airtel Lanka (Private) Ltd commented, “The integration of Dialog and Airtel Lanka operations will unlock new opportunities for innovation and growth, and this will benefit consumers.”

Shares of Bharti Airtel were trading 5.04% higher at ₹1,277.80 apiece on the NSE at 2:40 PM.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Mobile bills may go up post the election

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mobile bills are likely to rise as Balaji Subramanian, Vice President of IIFL Securities, expects telecom companies to increase tariffs post-elections.

“The first round of tariff increases should happen probably after the election. So, sometime in the second half of calendar 2024. And if you look at this industry, typically, price hikes happen every two years. So, we had something in late 2019, in 2021; this time since we are in the run-up to elections and the middle of calendar year 2026, we could see another tariff increase of 15-20%,” he told CNBC-TV18.

Subramanian believes most companies require substantial price increases in the next 2-3 years.

He also mentioned that in the broader industry context, perhaps after the elections, Reliance might contemplate making Jio platforms publicly available.

Therefore, leading up to that event, a rise in tariffs would enhance the profitability of all companies in the industry.

Also Read | Vodafone Idea FPO price band fixed between ₹10-₹11; Check lot size and date here

Meanwhile, Vodafone Idea announced in a filing on April 12 that it has set the price range for its Follow-on Public Offer (FPO) at ₹10 to ₹11 per share. The FPO is scheduled to begin on April 18 and end on April 22. The company aims to raise ₹18,000 crore through this FPO.

Also Read | Indian telecom regulator initiates consultation on spectrum auction in crucial 5G bands

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bharti Airtel shares can cross ₹1,500 as telco set for best financial performance in 10 years: Analyst

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bharti Airtel shares have the potential to rise over ₹280 more, says brokerage firm Antique which has initiated coverage on the telecom company with a ‘buy’ rating and a target price of ₹1,505. The target price implies an upside of more than 23% in the stock price from the April 9 close.

Bharti Airtel shares trade almost 1.5% higher at ₹1,219.50 on BSE at 10:20 am on April 10. In the past year, the stock has made investors richer by 58% as against the benchmark Sensex’s 25% rise during the same period.

Antique believes the telecom company is set to ride its best financial performance phase in over a decade driven by tariff hikes, 2G upgradation and strong growth of the enterprise. The brokerage expects return ratios to top 20%.

Also Read: Analyst warns this telco’s share could plummet over 60% to ₹5 — Here’s the reason

In fact, following the October to December 2023 results, Morgan Stanley pointed out that Airtel’s higher-than-expected capex led to lower free cash flow (FCF) and that higher finance lease obligations resulted in higher net debt versus expectations.

As per its latest note, Antique expects the telco to witness historic high free cash flows that will drive balance sheet deleveraging.

The brokerage also pointed to certain challenges like Bharti Airtel choosing a different 5G rollout path versus key competitors. However, it believes it is unlikely to dent the firm’s subscriber base or growth significantly.

The data released by the Telecom Regulatory Authority of India (TRAI) earlier this week shows that the Sunil Mittal-led firm upped its wireless subscriber count by 7.78 lakh, taking its mobile tally to 15.30 lakh in February.

Also Read: Why telcos might show limited interest in the upcoming spectrum auction

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bharti Hexacom set to launch IPO on April 3

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Telecom operator Bharti Airtel’s subsidiary Bharti Hexacom’s initial share sale will open for public subscription on April 3. The three-day initial public offering (IPO) will conclude on April 5, and the anchor book of the offer will open for a day on April 2, according to the Red Herring Prospectus (RHP) filed on Friday. This will be the first IPO in the financial year 2024-25.

The maiden public issue is purely an offer-for-sale of up to 7.5 crore shares (representing a 15% stake) by existing shareholder — Telecommunications Consultants India Ltd. The OFS size has been reduced to 7.5 crore from 10 crore equity shares planned earlier.

Since the IPO is completely an OFS, the entire proceeds will go to the selling shareholders, and the company will not receive any funds from the issue. Bharti Hexacom obtained its observation letter on March 11 from the capital markets regulator Sebi to float the public issue.

Promoter Bharti Airtel holds a 70% stake and the remaining 30% shareholding is held by state-run Telecommunications Consultants India Ltd. Bharti Hexacom is a communications solutions provider, offering consumer mobile services, fixed-line telephone and broadband services to customers in the Rajasthan and the North East telecommunication circles in India.

It is among the top global mobile operators in terms of number of customers and India’s largest integrated communications solutions provider in terms of consolidated operating revenue as of fiscal 2023. In spite of strong topline and operating figures, the company reported a 67.2% year-on-year fall in net profit of Rs 549.2 crore for FY23. This decline was caused by a larger base as a result of exceptional gains of Rs 1,951.1 crore in the previous year.

SBI Capital Markets Ltd, Axis Capital, BOB Capital Markets, ICICI Securities and IIFL Securities are the book-running lead managers to the issue. The company’s equity shares will be listed on the BSE and NSE.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Airtel arm Bharti Hexacom gets Sebi nod to raise funds via IPO

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bharti Hexacom, which is owned 70% by telecom service provider Bharti Airtel Ltd., received capital markets regulator Sebi’s go-ahead to raise funds through an initial public offering (IPO). This will be the first IPO from the Bharti Group after over a decade.

The last IPO to have come out from the Bharti Group was Bharti Infratel, now known as Indus Towers, which was listed back in 2012.

The latest IPO is entirely an offer for sale (OFS) of up to 10 crore shares by the only public shareholder, Telecommunications Consultants India. Since the issue is an OFS, Bharti Hexacom will not receive any proceeds.

Bharti Hexacom had filed its draft papers with the Securities and Exchange Board of India (Sebi) earlier in January 2024.

As per the draft red herring prospectus (DRHP), parent company Bharti Airtel holds a 70% stake or 35 crore equity shares and the rest 30% shareholding or 15 crore equity shares is being held by Telecommunications Consultants India.

On March 11, the capital markets regulator issued an observation letter on the IPO draft papers of the company. In Sebi parlance, the issuance of an observation letter means the company can launch its IPO within the next one-year period.

What does the co do?

Bharti Hexacom runs mobile services in Rajasthan and the Northeast telecommunication circles of India, which comprises Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura. It has a market share of 40% in Rajasthan and 50% in the Northeast.

Bharti Hexacom, as per its annual report, is targeting to cover all the urban areas and a few pockets of rural areas with 5G services by March this year. Airtel’s 5G Plus offers up to 30 times faster download speeds than 4G, it claimed in its annual report adding that the 5G handset ecosystem is gradually evolving with more choices for customers at affordable price points.

For FY23, the Airtel unit recorded a net profit of ₹549 crore. Its revenue from operations remained strong rising 22% to ₹6,719 crore.

For the six months ended September, the company posted a revenue of ₹3,420 crore, compared to ₹3,167 crore in the same period a year ago. However, its net profit declined to ₹69 crore from ₹195 crore in the year-ago period. The profit was impacted by higher tax costs and exceptional loss.

SBI Capital Markets, Axis Capital, BOB Capital Markets, ICICI Securities, and IIFL Securities are the book-running lead managers to the IPO, while Kfin Technologies Limited is the registrar.

CNBC-TV18 was the first to break the story in November last year.

Shares of Bharti Airtel settled 0.0082% higher at ₹1,225.40 on Tuesday. The stock has gained 21% so far in 2024.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why telcos might show limited interest in the upcoming spectrum auction

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The upcoming spectrum auction, scheduled for May 20, 2024, might see muted participation from telecom majors, say experts.

They cite two key reasons for the likely low participation–one, the completion of 5G rollout by two key players, Bharti Airtel and Reliance Jio, and two, the excess of unutilised spectrum with telcos.

The government plans to auction nearly 10,000 megahertz (10 gigahertz) of spectrum worth nearly ₹96,300 crore ($11.5 billion) this May. This is spread across eight different bands with no sub-gigahertz bands like 700 or 600 megahertz.

The reserve price, which is the minimum bid amount, remains largely unchanged, except for a minor increase in some bands like 2,100 megahertz.

India’s leading telcos spent nearly ₹1.5 lakh crore at the last auction held in August 2022.

However, limited competition is expected this time with telcos only bidding in circles where their licences are expiring.

For Bharti Airtel, around 42 megahertz of spectrum will be expiring soon, while for Vodafone Idea, it’s only about 12 megahertz. For Jio, there are no licences coming up for renewal.

Also Read | Cabinet greenlights telecom spectrum auction across multiple bands at base price of Rs 96,317.65 crore

While there is no pressing need for telcos to bid for fresh spectrum, if they bid only in circles where their licenses are going to expire, then Kotak Institutional Equities expects Bharti to spend roughly ₹3,800 crore, and Vodafone Idea to spend ₹1,500 crore.

Also Read | Telecom outlook 2024: Experts weigh in on key sector drivers, Vodafone’s debt woes

Jefferies expects the demand to be limited to $0.5-2 billion, or a maximum of  ₹16,000 crore.

The absence of 700 megahertz should allay concerns about overspending by Bharti Airtel, which the brokerage firm believes could spend a little over $0.5-1.5 billion.

Disclosure: RIL, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bharti Airtel Block Deal: GQG Partners buys 0.8% stake from Singtel

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Rajiv Jain-led US-based investment firm GQG Partners has bought 4.9 crore equity shares of telecom operator Bharti Airtel from promoter group entity Singapore Telecommunications or Singtel. The deal for 0.8% direct stake in Bharti Airtel is valued at S$0.7 billion (approximately ₹5,849 crore).

This transaction is the latest in the Singtel Group’s capital recycling efforts to unlock value from its assets, bringing the total capital recycled to S$8 billion since its strategic reset in 2021, Singtel said in an official release.

“We’re pleased to have raised S$0.95 billion, while adding a marquee name to Airtel’s share base. The Group is now in an even stronger position to execute our disciplined capital approach of balancing investing for greater growth and delivering strong, sustainable returns for our shareholders,” Singtel CFO Arthur Lang said.

“Airtel continues to see steady growth across all its businesses and has been rewarded with strong market valuations. We believe there’s more room for growth given India’s accelerated digital transformation and we intend to stay invested for the long term while working with Bharti Enterprises to equalise our effective stake in Airtel over time,” he added.

Following the transaction, Singtel’s effective stake in Bharti Airtel reducing from 29.8% to 29%. Earlier in 2022 also, Singtel had sold a 3.3% direct stake in Airtel for approximately S$2.54 billion.

Shares of Bharti Airtel Ltd were trading 0.36% higher at ₹1,198 apiece on NSE during today’s morning trade. The scrip has gained 18.30% since the beginning of this year.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

No hike in 5G tariff plans, says Sunil Mittal as Airtel pushes for ₹300 per user revenue

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Sunil Mittal, the Chairman of Bharti Enterprises, has set an ambitious target of achieving a ₹300 average revenue per user (ARPU) by the end of the fiscal year 2024-25 (FY25). Despite the prevailing scepticism surrounding potential tariff hikes in the wake of 5G deployment, Mittal remains steadfast in his vision, saying users will not pay anything extra for 5G.

Mittal reiterated the importance of the ₹300 ARPU target, which, despite inflationary pressures over the years, remains essential for funding crucial network infrastructure enhancements. “I mentioned ₹300 many years back. And a lot of inflation has taken place in the last 5-7 years where electricity prices are up, employee costs are up, almost every touchpoint is up in terms of costs. Yet, we are still talking about ₹300,” he told CNBC-TV18.

For the December-ending quarter, Bharti Airtel reported an ARPU of ₹208, for context, an improvement against ₹193 in the corresponding quarter of 2022.

Regarding the prospects of 5G deployment, Mittal stressed the limited willingness of consumers to pay extra for 5G services, particularly in the absence of substantial industrial applications. He remarked, “People are not going to pay you anything extra for 5G unless you’re going to do industrial applications.” Mittal also highlighted the potential for monetisation in industrial settings through AI and 5G integration, stating, “You can see early signs of AI and 5G combined networks running for the industries, especially industrial units.”

Mittal highlighted the necessity for a robust ARPU framework to offset the substantial investments made in spectrum and network infrastructure. He said, “There is going to be (no hike in tariff) for the millions that have been spent on the spectrum as a network and that’s why the need to have ₹300 become even more acute.”

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Carlyle may make a profit of 3 to 4 times from this Airtel venture

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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American private equity firm Carlyle is looking to sell its 24% stake in Nxtra Data Ltd, the data centre unit of Bharti Airtel Ltd. Carlyle is looking at a valuation of $850-900 million against its acquisition valuation of $235 million, global broking firm Macquarie said while assigning a ‘Neutral’ rating on the stock with a target price of ₹1,060 per share.

Carlyle acquired a stake in Nxtra for $235 million or about ₹1,800 crore in 2020.

According to Macquarie, the enterprise business accounts for 16% of the target based on 10 times FY25 to FY26 enterprise value and EBITDA, against this reported deal valuation for Nxtra data centre implied at 20-23 times FY25 EV and EBITDA.

A possible sale of Carlyle’s stake in the company would be its fourth exit this financial year after it sold part of its stake in YES Bank through a block deal for ₹1,160 crore.

Carlyle also sold its 2.5% stake in Delhivery for ₹709 crore in June. In August, it sold its 2.17% stake in Piramal Pharma.

Nxtra by Airtel has 12 large and 120 edge data centres across the country. It had previously said it would invest over ₹5,000 crore over the next few years to build six new hyperscale data centres across key metro cities in the country and expand its capacity by 2 times to over 400 MW.

Nxtra’s revenue has grown at an average annual pace of around 13% over the past five years (from ₹852 crore in FY19 to ₹1,601 crore in FY23), driven by robust demand for its services, according to Care Ratings. The rating agency noted that Nxtra has strong links with parent Airtel, making it an important subsidiary for the parent.

Airtel shares opened nearly a percent lower to trade at ₹1,122.90 apiece on NSE. The scrip is up 11% so far this year and has gained nearly 50% in the last one year.

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow