Bharti may look for domestic buys after new norms

Bharti Airtel on Friday said it might look at acquisitions within the country if Trai’s recommendations on a liberalised merger policy were cleared by the government.

When asked if Bharti would be open to acquisitions in the country, Bharti Airtel CEO for India and South Asia, Sanjay Kapoor, said, “We will never be averse to any inorganic growth.” However, he declined to give any specific details. Trai’s recommendations would give serious and long-term players a platform to move towards consolidation in the sector, he added.

Singapore Telecommunications (SingTel), which has a stake in Bharti Airtel, had said earlier this year Bharti could look at consolidation opportunities in India. “Bharti is in a good position to look at consolidation because of its leadership position,” Chua Sock Koong, SingTel’s CEO, had said, according to a report.

Yesterday, Trai had announced revised norms for mergers and acquisitions. The new norms will make it possible for Bharti to buy out not only smaller players, which it could have done even under the current policy, but also one of the bigger players in the market with a reasonable market share and revenue.

However, the company, which is already highly leveraged due to its acquisition of Zain last year and the debt taken for paying 3G and BWA spectrum fees, might find generating more cash to be the main stumbling block for such an acquisition. The company has a debt of $13.1 billion (Rs 64,727 crore). "Prima facie, I would say these seem to be very balanced recommendations. In particular, I would like to talk about spectrum sharing and M&A norms, which seem very lucrative," Kapoor said.