Mittal family increases stake in Airtel, group arm to buy 3.3% from Singtel

Bharti Enterprises Chairman Sunil Mittal is enhancing his stake in Bharti Airtel with the acquisition of 3.3 per cent stake in the telco from his Singapore-based partner Singtel for around S$ 2.25 billion (Rs 12,895 crore).

The share purchase will be done through the promoter arm Bharti Telecom and is expected to close within 90 days. The Mittal family’s current effective holding in Bharti Airtel is 24.13 per cent.

Singtel and Bharti group have been partners for over two decades and the Singapore-based communication technology group is divesting a portion of its stake to fund its 5G capex and other growth plans over the next few years.

The Mittal family and Singtel are co-investors in Bharti Telecom, the promoter holding company in Bharti Airtel with 50.56 per cent and 49.44 per cent, respectively.

Additionally, the Mittal family and Singtel directly own 6.04 per cent and 13.8 per cent stake in Airtel.

“After this transaction, the Singtel Group is expected to own an effective stake of 29.7 per cent (in Airtel). This comprises a 19.2 per cent indirect stake through Bharti Telecom and a 10.5 per cent direct stake,” Singtel said in a press statement.

Bharti Airtel’s current market capitalisation is over Rs 4.15 trillion.

Speaking about the development, Sunil Mittal said: “Bharti Enterprises and Singtel have had two decades of an exceptional partnership based on mutual respect and trust. Over these years, Airtel has acquired a strong pan-India leadership position and also expanded to 16 countries in Africa and South Asia. After this inter-se transaction, Bharti Telecom will remain the principal vehicle to hold controlling shares in Airtel. Bharti Enterprises and Singtel have agreed to work towards equalizing their effective stake in Airtel over time. Bharti Enterprises looks forward to working with Singtel over the long term in taking Airtel to an even greater position of success.”

Arthur Lang, Singtel’s group chief financial officer, said, “As long-term strategic investors and partners, the value of our stakes in our regional associates has risen substantially over the years but has not been properly reflected in our share price. This sale in Airtel will be our first ever and seeks to address this gap by illuminating the sizable value of our holdings in Airtel. It is also part of our capital management approach to take monetisation opportunities that allow us to increase our return on invested capital and enhance total shareholder returns.”