Bharti Airtel, India’s second-largest telecom operator, is planning to raise more funds in 2022 via a preferential share issue. But this issue is not for the current promoters of the telco but for the outsiders. It is worth noting that the telco had raised Rs 21,000 crore via a rights issue in the previous quarter only.
In an exchange filing on Monday, Bharti Airtel has confirmed that the board of the company is scheduled to meet on January 28, 2022, for considering and evaluating the proposal of raising money through a preferential share issue.
Airtel’s Fund Raise to Help the Telco With 5G Investments
Bharti Airtel, just like the other telcos, will require plenty of funds in the bank before going for the 5G spectrum auctions. Further, the other investments that both 4G and 5G network services will require in the near future would run into thousands of crores.
The telco is not going for more debt as it only wants to deleverage from here. The previous rights issue also helped the company in getting funds where the debt didn’t increase. There are two promoters of the telco currently — Mittal Family, which owns 24.13% of the company and SingTel, which owns 31.72% of the telco.
A preferential issue is a way of raising money where the company directly offers the equity shares to a select group of people or institutions. It is neither a rights issue nor a public issue. Only groups and individuals selected by the company can participate in a preferential issue round. It is recognised as a faster way of raising funds.
The 5G spectrum auctions are not far, and the telco has already been readying its networks for a long time now. The filing from the company doesn’t specify the amount that is being planned to be raised. Note that it is not yet confirmed whether Airtel would go ahead with a preferential share issue. The scheduled board meeting will determine whether that would happen or not.