Bharti Airtel to sell off 5% stake in tower arm

Firm has appointed UBS as the banker for the deal, say sources; likely to raise Rs 3,750 cr

Bharti Airtel, the country’s largest telecom company, is learnt to have started the process of offloading a five per cent stake in its tower arm, Bharti Infratel, through an open market block deal.

According to sources, Bharti Airtel has appointed UBS the banker for the deal. Airtel owns 71.7 per cent in Bharti Infratel, and a five per cent stake sale would be Rs 3,750 crore on current valuations.

The plan is to use the proceeds to cut debt. However, no timeline has been set for the sale. When asked, a Bharti Airtel spokesperson declined to comment.

Bharti Infratel’s shares at the BSE were down 2.5 per cent and closed at Rs 386.50 on Wednesday.

In February 2015, Airtel sold 2.91 per cent equity in Infratel through a secondary market deal, raising Rs 1,925 crore. In November 2014, it raised Rs 2,100 crore by selling a 4.5 per cent stake in Infratel. The sale was done to comply with the minimum public shareholding norm of 25 per cent.

For the December quarter, Bharti Infratel had posted a 12 per cent increase in consolidated net profit to Rs 565 crore, from Rs 507 crore in the year-ago period. Consolidated revenue in the quarter grew five per cent over a year before, to Rs 3,093 crore. It had 88,055 towers at end-December 2015.

Bharti Infratel chairman Akhil Gupta had earlier said capital expenditure for the telecom sector was on the rise due to aggressive rollout of third and fourth generation technology networks, encouraged by increasing mobile mobile data usage and focus on quality of service.