Tag: Bharti Airtel

Bharti Airtel picks Axis Capital, JP Morgan, Citi as advisors for FY20’s biggest QIP

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

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Sunil Bharti Mittal-led telecom major Bharti Airtel has kicked off a mega $2 billion (roughly Rs 14,500 crore) fundraising exercise and shortlisted merchant banks Axis Capital, JP Morgan and Citi for FY20’s biggest qualified institutional placement (QIP) yet, sources with knowledge of the matter told Moneycontrol.

Earlier in the fiscal, Axis Bank and Bajaj Finance had raised Rs 12,500 crores and Rs 8,500 crores, respectively via the QIP route.

“Axis Capital has been engaged as the left lead book-running manager for the QIP. JP Morgan and Citi are also on board. More merchant bankers are likely to be appointed at a later stage prior to the launch,” a source said

“Law firm AZB & Partners has been engaged as the counsel for the issuer company i.e Bharti Airtel. The roadshows will begin shortly, maybe as early as this week and the QIP is likely to be launched in early January 2020,” added a second source.

Last week, Bharti Airtel’s board had given the nod to raise a combined $3 bn (around Rs 21,500 crores) through a mix of equity and debt.

The funds will be used to pay Bharti Airtel’s dues to the Department of Telecommunication (DoT). The dues were triggered by an adverse ruling by the Supreme Court that rejected the definition of adjusted gross revenue (AGR) proposed by telcos and excluded revenue from non-core telecom operations like rent, dividend, and interest income.

The additional provisions required to pay these dues led Bharti Airtel to post a whopping Rs 23,045 crore loss in Q2 from a net profit of Rs 118 crore the year ago. Vodafone Idea also reported a net loss of Rs 50,922 crore for the same quarter.

To provide some respite from the mounting losses, the government on November 20 granted a two-year moratorium on the repayment of the dues. Finance Minister Nirmala Sitharaman announced that the years of deferment of payments will be spectrum auctions for years 2020 to 2021 and 2021 to 2022.

“These deferred amounts will be equally spread over the remaining installments to be paid by the TSPs without any increase in the existing time period specified for making the installment payment,” said Sitharaman.

However, telecom firms Bharti Airtel and Vodafone Idea have sought further relief from the government. Recently, Vodafone Idea Chairman Kumar Mangalam Birla said that his company would have to shut shop if relief doesn’t come through.

According to brokerage firm CLSA, AGR risks for Bharti Airtel can likely lead to payments of Rs 34,300 crore or $4.7 billion, of which around 75 percent is interest and penalties.

Morgan Stanley has maintained an overweight rating on Bharti Airtel saying the recent tariff hike by the company is a step in the right direction. “FY21 ARPU will likely see substantial improvement,” the brokerage added.

Recently, all three major private telcos, Bharti Airtel, Reliance Jio and Vodafone Idea also hiked their respective tariffs leading to a rally in stock prices. On December 3, Bharti Airtel increased the charges of its prepaid voice and data services by up to 47 percent. Reliance Jio and Vodafone Idea also raised charges by up to 40-42 percent.

“With pricing sanity back in the telecom sector, this is a good time for Bharti Airtel to raise money,” added another source. The company’s share price has surged by 20 percent in a month, between November 6 and December 6. During the same period, rival Vodafone Idea’s share price has surged by 79 percent.

Bharti Airtel, Citi, and JP Morgan declined to comment in response to an email query and Moneycontrol is awaiting a response from Axis Capital and AZB & Partners.

(Source: Moneycontrol.com)

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd. 

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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

Bharti Telecom seeks Rs 4,900 crore FDI nod; infusion to make Airtel foreign firm

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

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Bharti Telecom, a promoter of Bharti Airtel, has sought government nod for the infusion of Rs 4,900 crore investment from Singapore-based Singtel and other foreign entities, a move that would make the country’s oldest private telecom operator a foreign entity.

The fund infusion will enhance foreign stakeholding in Bharti Telecom to over 50 percent that will make it a foreign-owned entity, an official source aware of the development told PTI. Currently, Sunil Bharti Mittal and his family own around 52 percent stake in Bharti Telecom.

Bharti Telecom holds around 41 percent stake in Bharti Airtel while foreign promoter entities hold 21.46 percent stake in the telecom firm. Public shareholders have around 37 percent stake in the company.

“Bharti Telecom has applied for infusion of Rs 4,900 crore in the company which includes investments from Singtel and some other foreign investors. With this Bharti Telecom will become a foreign entity as majority stake will be held by overseas investors. DoT is expected to approve this investment this month,” the source said.

The Department of Telecom had earlier this year rejected Bharti Airtel’s FDI application as the company had not provided clarity on the foreign investor.

Total foreign shareholding is 43 percent in Bharti Airtel, at present. With promoter firm Bharti Telecom becoming a foreign entity, foreign shareholding in the company will cross 84 percent, the source said.

Bharti Airtel has already been in discussion with Singtel and other entities for fund infusion.

The company in August had informed stock exchanges that Bharti Telecom in order to retire some debt may seek equity from its existing promoter group which may include overseas entity and Singtel in proportionate to its holding.

Bharti Airtel has said that even a marginal increase in foreign equity would take the foreign investment in Bharti Telecom above 50 per cent making it a foreign owned entity.

Bharti Airtel has already applied to raise FDI limit to 100 percent in the company.

Bharti Airtel board last week approved a proposal to raise $3 billion through QIP, stake sale and debt papers as the company owes adjusted gross revenues (AGR) dues of Rs 43,000 crore to the government.

The company will launch one or more QIPs or offer for sale of equity shares or a combination of similar offers to raise $2 billion. Rest $1 billion will be raised through debentures and bonds.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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

For pre-paid customers, Airtel removes cap on free outgoing call to other networks

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

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Telecom operator Bharti Airtel has removed the cap from free outgoing calls on other networks under its new plans for pre-paid customers that came into effect from December 3.

The company had earlier capped outgoing calls to network of another telecom operator to 1,000 minutes in case of plans with 28 days validity, 3,000 in 84 days validity plans and 12,000 in 365 days validity plan.

Also here: Airtel releases new tariff plans effective December 3. Check details here

Beyond this limit, customers were required to pay 6 paisa per minute for outgoing calls. “From tomorrow, enjoy unlimited calling to any network in India with all our unlimited plans. No conditions apply,” Bharti Airtel said in a tweet on Friday.

The company on December 1 announced new plans under which call and data charges became dearer for its pre-paid customers by up to 50 percent from December 3.

The company had announced new plans in “unlimited” category with 2 days, 28 days, 84 days, 365 days validity which on the back of the envelope calculations showed the higher price of up to 50 percent.

Also read: Bharti Airtel board approves raising up to $3 billion via debt, equity

Bharti Airtel increased its entry-level unlimited plan with a year-long validity by about 50 percent to Rs 1,499, with 24 GB of data, in place of Rs 998 plan which comes with 12 GB data usage limit. The price of 365-days validity plan in the same category with a daily data usage limit of 1.5 GB per day now costs 41.2 percent more at Rs 2,398.

The company also announced three new plans – Rs 219 with 28 days validity offering 1 GB per day, Rs 399 and Rs 449 plan with 56 days validity each, offering 1.5 Gb and 2 GB data usage, respectively.

With the removal of limit, Airtel’s new 399 plans with 56 days validity become cheaper than that of Reliance Jio plan at the same price. The move from both companies follows the Supreme Court judgement on adjusted gross revenue.

Bharti Airtel has posted a staggering Rs 23,045 crore net loss for the second quarter ended September 30, due to provisioning of Rs 28,450 crore in the aftermath of the Supreme Court ruling on statutory dues.

According to government data, the liabilities in the case of Bharti Airtel add up to nearly Rs 35,586 crore, of which Rs 21,682 crore is licence fee and another Rs 13,904.01 crore is the SUC dues (excluding the dues of Telenor and Tata Teleservices).

The government is currently not considering any proposal on waiver of penalties and interest on outstanding licence fee based on adjusted gross revenue (AGR), or on extending the timelines for telecom companies to pay up their statutory dues.

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

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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

Subscriber losses at Vodafone Idea to benefit Jio more than Bharti, says Fitch Ratings

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

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Kumar Mangalam Birla at the Hindustan Times Leadership Summit in New Delhi said said they would shut Vodafone Idea if they don’t get relief. He said it was important for the government to find a solution for the telecom sector.

Nitin Soni of Fitch Ratings who tracks the telecom space said there is no doubt that Vodafone Idea has been facing lot of challenges with low cash generation amidst shrinking base and they have struggled to pay some of the bank loans which they disclosed in last quarterly results. On top of this the  AGR dues of over Rs 44,000 crore would be a big challenge for Vodafone Idea, he added.

“It will be a real challenge for them to raise such a large amount of money from banks given that they are in financial distress. So we have to see what kind of relief Supreme Court judge in the review petition or the government can provide to the sector, especially when 75 percent of the total amount is interest and penalties and that is the real issue now,” he added.

According to him, any relief will be positive for the telecom sector and especially for Vodafone Idea. “As a rating agency we are conservative and have factored in a full amount that they will pay in the next three months,” he added.

Bharti Airtel is rated at – BBB and they are at rating watch negative, said Soni.

With regards to Vodafone Idea, he said, “We believe 25-30 percent tariff hike for them will not be sufficient to recover their cash generation to such a level at which they will start paying their bank loans in a proper manner.”

From industry perspective if Vodafone Idea were to shut shop then industry would definitely suffer in the form of job losses and there would be some repercussions on the tower industry including Indus- Infratel, which is in merger stage awaiting regulatory approvals. So their valuation could also beget if Vodafone Idea were to exit given large number of tenancies are with Indus- Infratel, said Soni.

According to him, it would not be in the national interest to have two private telcos and so government may provide some relief to continue having at least three private telcos.

“Jio has a really good momentum right now to gain subscribers. They have been gaining about 6-7 million subscribers. So it’s not as if Vodafone Idea is not losing subscribers at the moment, they are already losing about 4-5 million subscribers a month, but that is not going to Bharti, it is mostly going to Jio’s network,” Soni added.

However, in case Vodfone Idea were to rapidly lose market share and come down from 300 million to 100 million subscribers, then Bharti may benefit and the house would revise their forecast for Bharti, said Soni.

Disclosure: Reliance Industries, the parent company of Reliance Jio, owns Network 18 that publishes CNBCTV18.com.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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

Telecom woes: Market factoring in a kind of two-player scenario, says SBICAP Securities

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

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Kumar Mangalam Birla said they would shut Vodafone Idea if they don’t get relief from the government. Speaking to CNBC-TV18’s Shereen Bhan at the Hindustan Times Leadership Summit in New Delhi, he said it is important for the government to find a solution for the telecom sector.

Rajiv Sharma of SBICAP Securities is of the view that it was a very straight-forward statement from Mr Birla. It tells us the exact situation. He said the house had published a report post the tariff hikes highlighting that mere hikes would not be enough. Hikes would allow the companies to barely pay the adjusted gross revenue (AGR) dues over 10 equated instalments, assuming they were not losing subscribers which is a function of capex.

However, if there is no money to invest in capex then they are bound to lose subscribers. “So the tariff hikes don’t help and they need a relief from the government,” said Sharma.

“There is one more issue which is related to the AGR and the license-fee payments on companies which are non-telecom companies but have some kind of telecom license on operations. There, the penalties are huge if they also have to follow the same pattern. Something has to happen but we are just a month away from the pay-out. We are all hoping but we have not seen anything concrete so far,” he said, hoping that the statement by Mr Birla makes a deeper impact and there is some action.

In case Vodafone Idea were to shut shop then there are several consequences, said Sharma. “First is job-losses. Second is tower company business model comes under question. Third, there wouldl be questions around innovation, tele-density disruption,” said Sharma, adding that both Bharti and Jio were not straight forward ready to absorb the entire subscriber base of Vodafone Idea, particularly the 2G subscribers, which only Bharti could address.

“Given that this whole narrative around slowdown and growth, there has to be a lot of thought around not only sustainability but where the US-China economies are on 5G, the digital start-up thing which the government has in mind, can it be supported without adequate telecom infrastructure and capex. So a lot of big picture questions need to be addressed over the next one month,” said Sharma.

From a stock perspective, he said, the house has a buy on Bharti Airtel and  believe that with the no-relief scenario and the proposed fund raising, Bharti can still manage to sail through these tough times and keep investing little bit in the networks. “Market seems to be factoring in a kind of two-player scenario but not fully,” he said

According to him, even if some relief comes in so much that Vodafone-Idea is able to repay the AGR dues and not able to invest in network, Bharti would gain on subscribers gradually and so will Jio. So both Jio and Bharti still look good and we have a sell on Vodafone Idea,” Sharma noted.

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

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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

Reliance Jio unveils new All-In-One tariff plan; up to 15-25% cheaper than Airtel and Vodafone Idea

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

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After Bharti Airtel and Vodafone Idea, Reliance Jio has announced the details of its new tariffs that will go live from December 6, 2019, and can be opted from all existing touchpoints.

On December 1, Jio had stated that it will be introducing a new All-In-One plan with unlimited voice and data. “These plans will have a fair usage policy for calls to other mobile networks. The new plans will be effective from 6th December 2019 (06/12/2019). Although the NEW ALL-IN-ONE plans will be priced up to 40% higher, staying true to its promise of being CUSTOMER-FIRST, Jio customers will get up to 300% more benefits,” its statement said.

The company has reiterated its position of ‘upholding the Jio promise of providing the best quality service at the lowest price globally’ and released the detailed tariff plans. Based on the announcement today, the highest price hike is at 39 percent.

While the tariffs will be available on My Jio app, website and all Reliance stores, here is a brief on what you get within the new plans:

The 1 month (28 days) plan with allowance for 1.5 Gb data per day is for Rs 199 and will free 1000 minutes to non-Jio numbers, the 2 months (56 days) plan with 1.5 GB/ day data allowance will cost Rs 399 with 2,000 free minutes to non-Jio numbers, the 3 months (84 days) plan will allow for 1.5 data per day at Rs 555 and 3,000 minutes on calls to non-Jio users and finally the 12 months (365 days) plan will cost Rs 2,199 and allow 1.5 Gb data per day with free 12,000 minutes to non-Jio numbers.

Jio to Jio calls are unlimited across plans. Similarly, prices have changed across plans based on the data allowance needed and price points. In the affordable segments, the Rs 129 plan is valid for 28 days with 2 GB data allowance (for complete period) and 1,000 free minutes to non-Jio numbers; the Rs 329 plan is valid for 84 days with 6 GB data allowance (for complete period) and 3,000 free mins to non-Jio numbers and the Rs 1,299 plan is valid for 365 days with 24 GB data allowance (for complete period) and 12,000 free mins to non-Jio numbers.

Jio to Jio calls to be unlimited:

• 1.5 GB/ day plan to cost Rs 199 for 1 month with free 1,000 minutes to non-Jio numbers.
• 1.5 GB/ day plan to cost Rs 399 for 2 months with free 2,000 minutes to non-Jio numbers.
• 1.5 GB/ day plan to cost rs 555 for 3 months with free 2,000 minutes to non-Jio numbers.
• 1.5 Gb/ day plan to cost Rs 2,199 for 12 months with free 12,000 minutes to non-Jio numbers.

Affordable Plans:

• Rs 129 plan for 28 days with 2 GB data allowance (for the complete period) and 1,000 free minutes to non-Jio numbers.
• Rs 329 plan for 84 days with 6 GB data allowance (for the complete period) and 3000 free minutes to non-Jio numbers.
• Rs 1,299 plan for 365 days with 24 GB data allowance (for the complete period) and 12,000 free minutes non-Jio numbers.

However, if you compare the popular plans, Jio seems to be cheaper:

For instance, for the 1-month plan with 1.5 GB data per day allowance, Jio is now charging Rs 199, whereas Airtel charges Rs 248 and Vodafone Idea charges Rs 249. The Rs 199 plan with 1.5 GB data/day is expected to be the most popular. In this band, Jio is almost 25 percent cheaper than Vodafone Idea and Bharti Airtel.

Let’s look at the 84-day plan with 1.5 GB data per day allowance, Jio charges Rs 555 versus Airtel’s 598 and Vodafone Idea’s Rs 599. In the 84 day plan with 2 GB data per day allowance, Jio charges Rs 599, whereas Bharti Airtel charges Rs 698 and Vodafone Idea charges Rs 699.

If you look at the full year, 365-day plan with 1.5 GB data per day allowance, Jio charges 2,199 whereas Airtel charges Rs 2,398 and Vodafone Idea charges Rs 2,399.

If you see the affordable plan, Jio charges Rs 129 for 2 GB data for 28 days, whereas Airtel charges Rs 148 and Vodafone Idea charges Rs 149. Similarly, Jio charges Rs 1,299 for the 24 GB plan for 365 days, whereas Airtel charges Rs 1,498 and Vodafone Idea charge Rs 1,499.

28-day plan with 1.5 GB/ day data allowance:

Reliance Jio Rs 199
Bharti Airtel: Rs 248
Vodafone Idea: Rs 249

84-day plan with 1.5 Gb/ day data allowance:

Reliance Jio: Rs 555
Bharti Airtel: Rs 598
Vodafone Idea; Rs 599

84-day plan with 2GB GB/ day data allowance:

Reliance Jio: Rs 599
Bharti Airtel: Rs 698
Vodafone Idea: Rs 699

365-day plan with 1.5 GB/ day data allowance:

Reliance Jio: Rs 2,199
Bharti Airtel: Rs 2,398
Vodafone Idea: Rs 2,399

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

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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