Bharti Airtel's fundraise garners $10 billion, three times its target

Bharti Airtel on Thursday received offers for subscriptions aggregating over $10 billion, three times its target of $3 billion, through a combination of qualified institutional placement (QIP) and foreign currency convertible bonds (FCCB), according to banking sources.

The issue opened Wednesday and has already been oversubscribed and according to banking sources the allocation of the shares will be made next week.  

According to sources, Fidelity, Blackrock, Goldman Sachs, BNP Paribas, Citigroup, Warburg Pincus, J P Morgan, Axis Capital, ICICI Pru, SBI Mutual, Aditya Birla Mutual HFDC Mutual and Temasek Holdings among others have offered to subscribe to the QIP.  

For the FCCB portion, offers have come from Blackrock, GIC of Singapore (which has also offered to subscribe the QIP), Barclays, Societe Generale and Standard Chartered Bank, among others. A Bharti Airtel spokesperson, however, declined to comment on the issue. 

GIC of Singapore currently holds around 4 per cent in Bharti Airtel.

Forced by a SC judgment ordering it to pay AGR (adjusted gross revenues) and spectrum usage charges dues of over Rs 35,000 crore by January end, Bharti decided to raise fresh funds through a combination of debt and equity to comply with the SC order. It has, however, also filed a review petition in the SC challenging the order asking it to pay interest on dues, penalty as well as interest on penalty. The industry has to fork out Rs 147,000 crore as part of the SC order and many companies like Vodafone-Idea have already said they might have to close operations.  

In its prospectus, Bharti said in case of a favourable SC order the company will utilise the money or part of it to augment long-term resources and strengthen its balance sheet for servicing and repayment of short and long-term debts, capital expenditure, long-term working capital requirement and general corporate purposes.