Bharti Airtel, the second-largest telecom operator in the country, has called the remaining Rs 15,740 crore raised via rights issue. The telco had raised a total of Rs 21,000 crore through the rights issue, but hadn't called for the Rs 15,740 crore. This was approved by the telco's board on Thursday and this will help the telco in cutting out debt from the balance sheet. Along with this, the board approved the management change, wherein Shashwat Sharma will take over as the new CEO of Bharti Airtel, and the current CEO, Gopal Vittal will be promoted to Vice Chairman of the telco.
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In the first tranche of the rights issue, the telco had raised Rs 5,247 crore. The analysts expect that promoters of the telco will pitch in around Rs 7,900-8000 crore of the Rs 15,740 crore. Bharti Telecom has a 40.47% stake in Airtel while Singtel now holds 7.49%. Airtel's financials are robust and the balance sheet is only going to grow stronger in the coming quarters with an expected tariff hike.
Even though there's no such complusion for the telco to raise funds, Airtel is now closing the rights issue cycle completely and would likely use the funds raised to deleverage the balance sheet. Airtel had raised money through the rights issue back in 2021, before the 5G auction, when the payment terms for the airwaves were uncertain. However, the government made it pretty simple and easy for the telcos to pay off spectrum, and thus, the telco didn't raise all the money right then.
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Bharti Airtel has the highest average revenue per user (ARPU) in the Indian telecom industry and has been improving margins and ROCE (return on capital employed) over the years. This cash is only going to help the telco in bolstering business further.
