Tag: Bharti Airtel

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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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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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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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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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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Reliance Jio adds 4 million wirelesss subscribers in December 2023, Airtel adds 1.85 million

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

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Reliance Jio Infocomm Limited (Jio) added 4.22 million subscribers (wired+wireless) in December 2023, taking its total subscriber base to 470.29 million, according to the latest subscriber data released by the Telecom Regulatory Authority of India (TRAI) on Thursday, February 22.

During the same period, Bharti Airtel (Airtel) added 2.41 million subscribers, taking its total to 264.76 million.

In the wireless subscriber space, Jio added nearly 4 million and Airtel 1.85 million, while Vodafone Idea lost nearly 1.37 million subscribers.

According to the TRAI data, Jio is the leading service provider (wired+wireless) with a 51.98% market share, with Airtel cornering 29.27% of the market. Vodafone Idea, with a 127.29 million subscriber base, accounts for 14.07% of the market share.

When it comes to states/regions, TRAI stated in its report that all states except Maharashtra, Jammu & Kashmir and West Bengal witnessed a growth in wireless subscribers. Maharashtra declined by 0.08%, J&K by 0.14%, and the Kolkata circle by 0.42%.

According to the TRAI report, the total number of telephone subscribers witnessed a rise from 1.18 billion in November 2023 to 1.19 billion by the end of December 2023, indicating a monthly growth rate of 0.39%. Specifically, TRAI stated, urban telephone subscriptions increased from 659.58 million to 662.56 million during the same period, while rural subscriptions also saw a rise from 526.15 million to 527.77 million. The monthly growth rates for urban and rural telephone subscriptions in December 2023 were 0.45% and 0.31%, respectively.

In the past 12 months, Reliance Jio has added a net total of about 37 million wireless subscribers, Airtel added 32.2 million and Vodafone Idea lost 20.67 million. Reliance Jio clocked its highest subscriber intake in the past 12 months in July 2023 at 3.9 million, while Vodafone Idea lost the most with nearly 3 million.

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Bharti Airtel to procure 1.4 Lakh MWh renewable energy for its Nxtra data centres

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

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Bharti Airtel Ltd on Wednesday announced that its subsidiary and one of India’s leading data centre companies, Nxtra is set to procure an additional capacity of 140,208 MWh of renewable energy for its data centres.

The subsidiary of Bharti Airtel has entered into a power-wheeling agreement with Ampln Energy and Amplus Energy for the production of additional renewable energy. Through this move, the existing commitment of Nxtra, which is to reduce the company’s carbon footprint through renewable energy sources, has been enhanced annually by almost 99,547 tonne CO2 emissions.

According to the details of the power-wheeling agreements, AmpIn Energy and Amplus Energy will work towards setting up captive solar as well as wind power plants having capacities of 48 MWdc and 24.3 MW, respectively, for Nxtra’s data centres. These data centres are located across multiple states, including Uttar Pradesh, Tamil Nadu and Odisha.

The 25-year agreement is in line with Nxtra’s commitment to achieving its net-zero target of 2031 and further strengthens its credentials as India’s largest chain of green data centres in the country, stated the company in a press release dated February 14, 2024.

The aforementioned initiative adds to Nxtra’s multiple other interventions aimed at reducing absolute scope 1 and 2 greenhouse gas (GHG) emissions across all of its operations by 100% by FY2031.

“These new partnerships reflect our commitment to lead India’s green data centre space and fulfill our commitment to achieve Net Zero emission by 2031. The additional clean energy supply will increase our renewable energy share to approximately 70% in the overall energy mix for our core data centers,” said the CEO of Nxtra by Airtel, Ashish Arora on Wednesday.

Shares of Bharti Airtel ended flat in the red at ₹1,117.6 per piece on the NSE.

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Telecom licence fee collection rises 8.23% to ₹5,326 cr in September 2023 quarter

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

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The government’s licence fee collection from telecom service providers increased 8.23% year-on-year (YoY) to ₹5,326 crore, while spectrum usage charge mop up declined about 40% to ₹836 crore in the September 2023 quarter, according to the latest Trai report.

According to the performance indicator report released by regulator Telecom Regulatory Authority of India (Trai), operators’ gross revenue (GR) declined by 1.22% to ₹82,741 crore, but adjusted gross revenue (AGR) increased by 7.43% (YoY) to ₹66,583 crore during the reported quarter.

“On a YoY basis, GR decreased by 1.22%, ApGR (applicable gross revenue) increased by 6.74%, and AGR increased by 7.43% in the quarter ended September 2023,” the report released on Friday said.

Reliance Jio recorded the highest AGR of ₹24,217.13 crore with a 9.12% YoY rise.

Bharti Airtel posted the highest AGR growth rate of 10.88% at ₹19,840.84 crore during the quarter.

The AGR of debt-ridden Vodafone Idea remained almost flat at  ₹7,507.65 crore during the reported quarter.

State-owned BSNL’s AGR grew 1.93% to ₹1,966.44 crore, while MTNL’s AGR declined 16.35% on a YoY basis to ₹168.69 crore.

The government calculates its share of the revenue from the telecom sector in the form of licence fees and spectrum usage charges (SUC).

Access service providers or mobile operators like Reliance Jio, Bharti Airtel, and Vodafone Idea accounted for 81.67% of the total AGR.

“The License Fee (LF) increased from ₹5,246 crore for the QE (quarter ended) June 2023 to ₹5,326 crore for the QE September 2023. The quarterly and the Y-O-Y rates of growth in license fees are 1.53 and 8.23%, respectively, in this quarter,” the report said.

Mobile operators paid ₹4,350.67 crore as license fees and ₹831.49 as SUC.

As part of telecom reforms, the government has removed SUC on all spectrum procured through auctions conducted after September 15, 2021.

The total SUC declined to ₹836 crore in the September 2023 quarter from ₹1,403 crore a year ago.

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Why this analyst is bullish on Bharti Airtel

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

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Balaji Subramanian, Vice President at IIFL Securities, has given a ‘Buy’ recommendation on Bharti Airtel after the telecommunications service provider released its third quarter earnings on February 5. In an interaction with CNBC-TV18, Subramanian listed several reasons for his optimism on the company’s future.

Subramanian predicts an increase in tariffs after elections potentially improving the Average Revenue Per User (ARPU).

Additionally, the company’s rollout of 4G services in rural areas and plans for 5G deployment over the current (FY24) and next financial year (FY25) are expected to boost earnings.

Despite challenges such as a stiff competition and minimal tariff hikes, Bharti Airtel’s numbers have exceeded expectations, said Subramanian.

Subramanian also shared his view on Vodafone Idea (Vi), While the company saw subscriber declines earlier, the situation has improved in the recent quarters, and the focus is now on improving ARPUs, he noted, adding there may be some limitations to growth due to financial constraints, hindering its ability to invest in network expansion.

Bharti’s market capitalisation is currently at ₹6,54,286 crore, while that of Vodafone Idea is ₹68,346 crore.

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

Bharti Airtel shares: Q3 numbers healthy but analysts see upside capped on stock

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

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Shares of Bharti Airtel gained 4% in trade Tuesday (February 6) after the telecom major reported healthy earnings during the October to December quarter despite challenges from forex losses. At 9:33 am, the scrip was trading 2.82% higher at ₹1,145 apiece on the NSE. The stock has rallied 13% so far this year and it’s up 45% in the last one year.

Global brokerage house Morgan Stanley has equal weight rating on the Bharti Airtel stock with a target price of ₹1,015 per share. The broking firm sees an improvement in the company’s revenue from the India mobile business and EBITDA on the back of better subscriber mix as the key highlights of its Q3 earnings.

Bharti Airtel’s capex was stable quarter-on-quarter and surprised positively. The telco also saw a robust cash flow generation, highlighted Morgan Stanley in its research report.

Bernstein has an ‘Outperform’ rating on the counter with a target of ₹1,140 per share. The brokerage said that strong India ARPU (average revenue per user) with capex continue to moderate ARPU beat at ₹208, over 2.5% quarter-on-quarter and 7.8% year-on-year, driven by higher post paid adds and smartphone or data upgrades.

India wireless revenue grew 3.3% sequentially led by 2.5% ARPU growth and 1% growth in sub.

The telco reported a 54% jump in its net profit at ₹2,442 crore for the third quarter that ended on December 2023. The profit figure was much lower than CNBC-TV18’s poll of ₹3,200 crore.

Revenue from operations in the reporting quarter increased 6% to ₹37,899.5 crore, partially impacted by currency devaluations in Africa.

ARPU improved to ₹208 in the third quarter as against ₹193 in the corresponding quarter of the previous year.

“We have delivered yet another quarter of consistent and competitive growth across all our businesses. Revenue from India business sustained its momentum and grew sequentially by 3.0%, while the consolidated revenue was impacted by the devaluation of the Nigerian Naira and Malawian Kwacha,” said MD Gopal Vittal.

Vittal said the quarter witnessed a strong growth trajectory for the postpaid and Homes business, while our DTH business added 388k net adds – the highest in the last 12 quarters. “We remain on course with our strategy of premiumisation that helped us add 7.4 million 4G/5G customers and exit the quarter with an industry leading ARPU of ₹208. Even at this ARPU, our return on capital employed however, continues to be low at 9.4%. To ensure industry health, tariff repair is extremely critical.”

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