Bharti Airtel rings loud as Singtel to invest in promoter company

Bharti Airtel rose 2.09% to Rs 430.60 at 10:20 IST on BSE after the company announced that Singapore Telecommunications, a long term partner of the company, will invest Rs 2649 crore in its promoter company, Bharti Telecom.

The announcement was made before market hours today, 5 February 2018.

Meanwhile, the S&P BSE Sensex was down 320.86 points, or 0.91% to 34,745.89. The stock bucked weak trend in Sensex.

On the BSE, 1.66 lakh shares were traded in the counter so far, compared with average daily volumes of 85.54 lakh shares in the past one quarter. The stock had hit a high of Rs 436.70 and a low of Rs 411.80 so far during the day. The stock had hit a 52-week high of Rs 565 on 3 November 2017. The stock had hit a 52-week low of Rs 325.50 on 22 March 2017.

The stock had underperformed the market over the past 30 days till 2 February 2018, falling 18.3% compared with 3.71% rise in the Sensex. The scrip had also underperformed the market in past one quarter, dropping 22.33% as against Sensex's 4.45% rise. The scrip had also underperformed the market in past one year, rising 19.32% as against Sensex's 24.23% rise.

The large-cap company has equity capital of Rs 1998.70 crore. Face value per share is Rs 5.

The stock had dropped 14.07% in seven sessions to Rs 421.80 on 2 February 2018, from a close of Rs 490.90 on 23 January 2018.

Bharti Airtel announced that Singapore Telecommunications (Singtel), Asia's leading communications and ICT solutions group and a long term partner of Bharti Airtel, will invest Rs 2649 crore in Bharti Telecom, the promoter company of Bharti Airtel through preferential allotment of shares.

The transaction is subject to the shareholders' approval of Bharti Telecom. The funds raised will be used towards debt reduction. With this investment, Singtel's total stake (along with its affiliates) in Bharti Telecom will increase to 48.9%. Singtel currently holds 47.17% stake in Bharti Telecom. Bharti Enterprises continues to hold over 50% stake in Bharti Telecom.

The fresh round of investment highlights the confidence of Singtel in Bharti Airtel, and the increased attractiveness of the Indian telecom sector following the recent consolidation. The investment comes within 23 months of Singtel's participation in Bharti Telecom's right issue of Rs 2500 crore, which was completed in February 2016.

Bharti Airtel's consolidated net profit fell 16.5% to Rs 560.70 crore on 12.9% decline in net sales to Rs 20318.60 crore in Q3 December 2017 over Q3 December 2016.

Bharti Airtel is a leading global telecommunications company with operations in 16 countries across Asia and Africa.

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