Bharti Telecom plans to raise ₹7,000 cr via bonds; Airtel shares down 2%

Bharti Telecom (BTL), a key promoter company of Bharti Airtel, plans to raise ₹7,000 crore through the bond market, which will be used to refinance or repay its debt and meet expenses. The telecommunication company is reportedly looking to raise the funds through shorter-tenor bonds in three tranches and has invited bids from investors on Friday. The allotment of bonds will be done on November 21.

Bharti Telecom aims to raise ₹1,500 crore through two-year bonds at a coupon of 8.70% and ₹2,500 crore via three-year bonds at an 8.80% coupon. Besides, it will raise another 3,000 crore through three-year bonds at a six-month marginal cost of lending rate, which currently stands at 8.40%, as per the term sheet. Kotak Mahindra Bank is the banker for the bond issue.

Recently, the promoter entity of Bharti Airtel, Bharti Telecom increased its shareholding in Airtel by acquiring a 3.33% stake from Singapore Telecommunications (Singtel) and its affiliates for about SGD 2.25 billion ($1.61 billion or ₹12,895 crore). Bharti Telecom, jointly owned by Bharti Group chairman Sunil Bharti Mittal's family and Singtel, is the largest shareholder in Airtel with a 38.62% stake.

Both Singtel and the Sunil Mittal family are working towards equalising their stake in Airtel over a period of time. Bharti Telecom is aiming to calibrate and spread such acquisitions to maintain a comfortable level of leverage. The stake sale is expected to be executed anytime before November 23, 2022.

Separately, Bharti Airtel in an exchange filing on Thursday said it deployed 5G Plus service at Pune Lohegaon Airport, making it the first airport in the state to enjoy ultrafast 5G services. Besides, the telco recently announced the launch of 5G at the new airport Terminal at Bengaluru.

Last month, Bharti Airtel launched 5G services in eight Indian cities -- Delhi, Mumbai, Chennai, Bengaluru, Hyderabad, Siliguri, Nagpur and Varanasi. The services in these cities are getting rolled out in a phased manner as the company continues to construct its network and complete the roll out.

Meanwhile, shares of Bharti Airtel dropped as much as 1.8% to ₹831.1 in intraday trade on the Bombay Stock Exchange on Friday, in sync with the broader market. The telecom stock opened a tad lower at ₹850, against the previous closing price of ₹846.05 on the BSE. In comparison, the BSE Sensex was trading 311 points lower at 61,439 levels.

The index heavyweight hit a 52-week high of ₹851.70 on November 18, 2021, while a 52-week low of ₹629.05 on July 14, 2022.  The stock has risen 17% in a year and 20% in the last six months. In the past one month, the stock has gained 7%, while it rose nearly 1.5% in a week.