Bharti Airtel’s stock had a good day on Tuesday. The company’s shares closed at Rs 664.05, which is 7.03% higher than its opening price. The stock had hit the highest amount of Rs 668.10 and then closed a Rs 664.05. There was a total gain of Rs 43.60 as the stock had previously closed at Rs 620.45 on Monday. Bharti Airtel shares opened at Rs 626.05 on Tuesday and then surged more than 7% on the back of raising funds and other plans shared by Sunil Bharti Mittal in the company’s investor call.
Bharti Airtel Stock Went Up Because of This
Expecting a tariff hike in the near future, a lot of people might have purchased the shares of the company, assuming a medium-term gain. Sunil Bharti Mittal had hinted on Monday that Bharti Airtel wouldn’t shy away from raising tariffs.
This is good news for the investors, and that is why a lot of them jumped to purchase the company’s shares. Since Vodafone Idea (Vi) usually follows Airtel in terms of rolling out plans and tariff hikes, even Vi’s shares saw a marginal positive growth on Tuesday.
The fundraising plans of the telco also had a positive effect on the company’s stock. For the unaware, Bharti Airtel is planning to raise up to Rs 21,000 crore via a rights issue. This will provide the company with the boost of additional capital to invest in its networks and be ready for 5G. Since Airtel is raising money through equity, it helps the company in keeping its debt where it was, resulting in keeping its leverage ratio intact.
However, because of this capital raise, Bharti Airtel’s promoter’s will have to dilute their stake by up to 7%. Mittal explained that they didn’t want to raise their debt any further, and thus diluting the stake felt like a better option at the moment. It will be interesting to follow the stock of Bharti Airtel for the next few days.