Bharti Telecom, a company engaged in the telecom sector across the globe via its entity Bharti Airtel, is looking to raise up to 80 billion rupees or USD $961 million. The company is looking to raise the money via local-currency bonds. If successful, this would be the largest local-currency bond issue by Bharti Telecom.
Bharti Telecom is likely to seek bids this week. The notes will be due in two, three, and five years, said Bloomberg. Further, a week back, there were reports that Airtel is considering raising about USD $1 billion through offshore bonds. The telco was said to engage with major global banks such as Barclays and Citi to discuss the potential route to raise funds.
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Airtel wants to raise money via offshore bonds to pay off the spectrum debt related to the 2015 auction. The telco has about Rs 12,000 crore worth of deferred liabilities associated with the 2015 auctions. There could also be a scenario where Airtel might raise funds via rights issue. It is worth noting that the rights issue that the telco did earlier has plenty of money left to be claimed by Airtel. So the telco can always call up the remaining amount or a part of it to raise funds.
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The local bond issue could be for the same purpose to prepay debt related to the spectrum auctions. However, Bharti Telecom could also use the money raised to help with the 5G capex. The capex levels of Bharti Airtel have elevated due to the rapid 5G rollout throughout the country. Analysts expect the capex to normalise from FY25. Until then, to order equipment and build infra, the telco might need more funds in hand and that is where the 80 billion rupees could be used.
