Bharti Enterprises may use Airtel stake sale proceeds to fund BT purchase

Promoter group entity sells 0.84% share in telco for Rs 8,485 crore

The promoters of Bharti Enterprises will use the proceeds of the latest stake sale in Bharti Airtel to refinance loans taken to acquire a 24.5 per cent equity stake in British Telecom (BT) last year, multiple sources close to the development told Business Standard.

 

On Tuesday, Indian Continent Investment Limited (ICIL), a promoter-group entity of Bharti Airtel sold 0.84 per cent of its stake in the telecom operator. The 5.11 crore shares in Airtel were sold through a market transaction, for an aggregate amount of ₹8,485.11 crore, the telco said in an exchange filing.

 

Bharti Global, the international investment arm of Bharti Enterprises, had announced the acquisition in BT Group PLC in August last year. The move had made the Indian conglomerate the biggest shareholder in the UK’s second-largest telecom company both in terms of market value and subscriber count. The shares were purchased from billionaire Patrick Drahi’s Altice UK through a combination of cash and debt.

 

Sources said Tuesday's block deal would help the Bharti group to reduce this debt. The move would allow group entities to deleverage quickly, which has been a stated focus, they pointed out.

 

The block deal saw Bharti Telecom Limited (BTL), the promoter of Airtel, anchor the trade by acquiring 1.20 crore shares, or 24 percent of ICIL’s sale, Airtel said in a stock exchange filing. It said this will help the overall book to be allocated only to key marquee long only names, both global and domestic. Tuesday's deal saw the participation of US investment management company GQG Partners, alongside multinational financial services corporation Fidelity Investments, and financial advisory and asset management firm Lazard, people in the know said.

 

GQG Partners had earlier acquired a significant chunk in Airtel in March 2024, buying a 0.8 per cent stake directly from Singtel for $712.5 million. SBI Pension, SBI Life, and ICICI Prudential were among major domestic buyers.

 

The latest transaction also comes after Bharti Telecom acquired an additional 1.2 per cent stake in Airtel from ICIL in November last year. With the latest stake increase, BTL now holds nearly 40.5 per cent stake in Airtel. Sources said BTL is keen to pick up further stakes in Airtel going forward, when and if the opportunity comes.

 

Queries mailed to the company did not elicit a response. Shares of Airtel closed at ₹1,668 on Tuesday, down 0.43 per cent.

 

A day before, Bharti AXA Life Insurance had announced that funds managed by 360 ONE Asset will acquire a 15 per cent stake in the company. This investment will strengthen its growth trajectory and help it in expanding market share. “The investment will help accelerate the company’s plans to enhance its product offerings and expand its distribution network to meet the evolving needs of consumers”, the company had said. The transaction is subject to regulatory approvals.

 

(With inputs from Samie Modak)