At Rs 4 trillion, Bharti Airtel beats SBI in market cap ranking

At 01:43 pm; Bharti Airtel traded 5.4 per cent higher at Rs 731.80, with an m-cap of Rs 4.02 trillion

Telecom services provider Bharti Airtel joined the elite group of companies having market captialisation (m-cap) of Rs 4 trillion after the stock price of the company hit a fresh record high of Rs 734.60, up 6 per cent on the BSE in the intra-day trade on Wednesday.

At 01:43 pm, Bharti Airtel was 5.4 per cent higher at Rs 731.80, with an m-cap of Rs 4.02 trillion on the BSE, data shows. Bharti Airtel, today, surpassed state-owned banking giant State Bank of India (SBI) in m-cap ranking that has an m-cap of Rs 3.92 trillion.

According to media reports, the Union Cabinet has likely approved a moratorium on payment of spectrum dues by telecom firms as part of a package for the sector aimed at giving relief to companies such as Vodafone Idea that have to pay thousands of crores of rupees in unprovisioned past statutory dues. 

In the past 13 trading days, Bharti Airtel's share price has appreciated 23 per cent after the telecom services provider, on August 30, announced its plan to raise funds up to Rs 21,000 crore by way of the rights issue, primarily to fund its dues linked to adjusted gross revenue (AGR). Further, according to a media report, Google is now in talks to make large investments in Airtel, thus boosting the stock further.

“Being a significant player in the telecom and digital industry, the company receives interests from high quality investors and companies for its various businesses. The company evaluates various opportunities of potential investor engagement and takes decisions in a judicious manner,” Bharti Airtel had said on clarification on media report.

Meanwhile, the Sunil Mittal-led firm has set the rights issue price of Rs 532 per share. Further, the rights entitlement ratio entails one equity share for every 14 equity shares held by eligible shareholders as on the record date. The company is yet to announce the ex-date, RE trading window and allotment timelines for the rights offering.

Last week, the ratings agency S&P Global revised Bharti Airtel’s outlook to “stable” from “negative,” on the back of the company's operating fundamentals and superior leverage management. “The stable outlook reflects our view that Airtel will actively manage its leverage such that its ratio of funds from operations (FFO) to debt will stay well above 20% on a sustained basis, while maintaining its competitive position,” S&P Global said in a statement.

The ratings expects Airtel’s upcoming mega funds raise via rights issue to alleviate the likely impact from upcoming 5G spectrum liabilities, which is necessary for the telco’s competitiveness. CLICK HERE FOR FULL REPORT