Bharti Airtel to Raise Rs 3000 Crore from Debentures, Plans to Bolster 4G Network

Bharti Airtel has now confirmed to raise Rs 3,000 crore through listed, unsecured, rated, redeemable, non-convertible debentures through a private placement. These funds will help the telco to compete with Reliance Jio by bolstering its 4G network, which has been the case for the last 18 months. Airtel has been reducing its stake in its tower arm Bharti Infratel to reduce the debt and free up cash. So far, Airtel has raised Rs 12,089 crore through multiple tiny stake dilutions. The latest Rs 3,000 crore raising news is confirmed by a regulatory filing to BSE.

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“Pursuant to Regulation 29 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and within the authority of the special resolution passed by the shareholders of the Company through postal ballot on March 14, 2017, a meeting of committee of directors is scheduled on Tuesday, March 13, 2018, to inter-alia consider and subject to market and other conditions, issue listed, unsecured, rated, redeemable, Non-convertible Debentures (NCDs Series I and II) on private placement basis aggregating up to Rs. 3,000 crores,” the Airtel said in a regulatory filing to BSE late Thursday night.

As mentioned, Airtel has been in the middle of a fierce war with Reliance Jio as the latter is aggressively posing a threat to the former in the competitive Indian market. This is ultimately leading Airtel to reduce its stake in its wholly-owned tower arm Bharti Infratel. Airtel recently said that it might sell a much larger stake in Infratel in the coming days and the number would be much higher than what Airtel has sold until now. At the moment, Bharti Airtel and its wholly-owned arms own 53.51% stake in Bharti Infratel.

Also, Airtel recently boosted its capital expenditure guidance for FY2018 to Rs 25,000 crore from the earlier Rs 20,000 crore. And Airtel already confirmed that the additional expenditure would be used to bolster the network, increase the fiber capacity and of course to deliver better services to the consumers.

Currently, consumers are the most benefitted ones as Reliance Jio has changed the landscape of Indian telecom industry. But heavyweights such as Bharti Airtel, Vodafone India and Idea Cellular or to be precise, the GSM operators are feeling the pressure. Airtel recently got a massive investment of Rs 2,649 crore from its largest shareholder Singapore Telecommunications (SingTel).

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