Bharti Airtel turns volatile after board OKs fund raising

Bharti Airtel was down 1.39% at Rs 454.45 after the company said its board approved raising up to $3 billion through a mix of equity and debt.

The company will raise $2 billion through one or more instruments such as a qualified institutional placement, compulsory convertible debentures or other convertible securities, American depositary receipts (ADR) and global depositary receipts (GDR), according to a regulatory filing.

Bharti Airtel also plans to raise up to $1 billion by issuing foreign currency convertible bonds (FCCBs), and similar security in a foreign currency, or through redeemable non-convertible debentures, it said.

Bharti Airtel informed the exchanges that, for now, the total quantum of funds to be raised would not exceed $3 billion. The announcement was made post trading hours, 4 December 2019.

On 24 October 2019, the Supreme Court of India (SC) delivered a judgement in relation to a long outstanding industry-wide case upholding the view considered by Department of Telecommunications (DoT) in respect of the definition of Adjusted Gross Revenue (AGR) (Court Judgement). This Court Judgement has significant financial implications on the company. SC has allowed a period of three months to the affected parties to pay amounts due to DoT.

The telecom firm reported a consolidated net loss (excluding extraordinary items) of Rs 23,044.90 crore in Q2 September 2019 compared with a net profit of Rs 118.80 crore in Q2 September 2018. Net sales rose 4.9% to Rs 21,131 crore in Q2 September 2019 from Rs 20,147.80 crore in Q2 September 2018.

The company provided for an additional amount aggregating Rs 28,450 crore as a charge for the quarter (comprising of principal of Rs 6,164 crore, interest of Rs 12,219 crore, penalty of Rs 3,760 crore, and interest on penalty of Rs 6,307 crore) with respect to the license fees estimated based on the court judgement and spectrum usage charges (SUC) as estimated based on the definition of AGR.

On 3 December, Bharti Airtel increased the charges of its prepaid voice and data services by up to 47%.

Bharti Airtel is a global telecommunications company with operations in 17 countries across Asia and Africa.

On the technical front, the stock's RSI (relative strength index) stood 65.81. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock was trading above its 50-day placed at Rs 387.78 and its 200-day moving average (DMA) placed at Rs 345.65.

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