Singtel offloads 1.2% direct stake in Airtel for $1.5 bn via block deal

Transaction priced at a 2.85% discount to Airtel's closing stock price on Thursday

Singtel on Friday sold Bharti Airtel shares worth $1.5 billion (₹12,750 crore) through a scheduled block deal that saw its stake in the telco reduce by 1.2 per cent.

 

Offloading 71 million Airtel shares at ₹1,814 apiece, Singtel will now hold 28.3 per cent stake in Airtel, down from 29.5 per cent earlier. Executed through its wholly owned subsidiary Pastel, the sale was oversubscribed. The transaction was priced at a 2.85 per cent discount to Airtel's closing stock price on Thursday.

 

In an exchange filing, the Singapore-headquartered telecom operator said the sale was part of its active capital management approach to optimise its asset portfolio and drive shareholder returns sustainably. It added that it has been working with Bharti Enterprises to equalise its effective stake in Airtel in the medium term. “This transaction allows us to crystallise value at an attractive valuation while remaining a significant shareholder of Airtel," said Arthur Lang, group chief financial officer of Singtel. 

   

Singtel is a significant shareholder in Airtel, holding a direct 8.3 per cent stake in Bharti Airtel through its affiliate Pastel Ltd. But cumulatively, it has a higher stake due to an indirect interest in Airtel through its 49.44 per cent stake in Bharti Telecom Ltd (BTL), the primary promoter entity of Airtel. BTL itself owns 40.47 per cent of Airtel while the (Sunil) Mittal family holds a 2.47 per cent direct stake through another promoter entity Indian Continent Investment Ltd (ICIL). 

 

Bharti Airtel shares closed at ₹1,814.35 per share on the BSE on Friday, 2.8 per cent lower than the previous close.

 

Friday's sale was the first major change in stake for Singtel since March last year when it had sold 0.8 per cent stake (49 million shares) in Airtel to US investment management company GQG Partners for $711 million. SBI Pension, SBI Life, and ICICI Prudential were among major domestic buyers. Before this, Pastel had divested 1.59 per cent stake in Bharti Airtel for ₹7,261 crore through an open market transaction in November, 2022. This came three months after Singtel sold 3.3 per cent stake in Bharti Airtel to BTL for ₹12,895 crore, or $1.6 billion, in August 2022.

 

The latest block deal saw the first major change in Airtel's ownership since February, when ICIL had sold 0.84 per cent of its stake by offloading 5.11 crore shares through a market transaction, for an aggregate ₹8,485.11 crore. The block deal had seen BTL anchor the trade by acquiring 1.20 crore shares, or 24 per cent, of ICIL’s sale.