Bharti Airtel to allot equity worth ₹42 cr to FCCB holders

Shares of Bharti Airtel were in focus on Wednesday after the telecom operator said that it has approved the allotment of equity worth $5.1 million (about ₹42 crore) to its foreign debt bonds holders. The telco will allot 706,161 fully paid-up equity shares of face value ₹5 each at a conversion price of ₹521 apiece to its foreign currency convertible bonds (FCCBs) holders, Bharti Airtel said in a regulatory filing.

The country’s second largest telecom company in terms of subscribers base had issued $1 billion 1.5% FCCBs in January 2020, due in 2025. The bonds were issued just a week before the deadline to pay adjusted gross revenue (AGR) related dues of around ₹35,500 crore to the Department of Telecommunications (DoT).

The bonds were convertible into the company's fully paid-up equity shares of ₹5 each at any time on or after February 27, 2020 and up to February 7, 2025, at the option of the FCCB holders.

“We wish to submit that upon receipt of notice for conversion of FCCBs of principle value of USD 5,108,000 from certain holders of FCCBs, the Special Committee of Directors for Fund Raising has on April 4, 2023, approved the allotment of 706,161 fully paid-up equity shares of face value ₹5 each at a conversion price of ₹521 per equity share to such holders of FCCBs,” Airtel said in a BSE filing.

With this, the outstanding principal value of FCCBs, as listed at Singapore Exchange, stands reduced to $908.59 million, it added.

Following the allotment of equity shares, paid-up equity share capital of the company will increase to ₹2,836.95 crore divided into 557.584 crore fully paid-up equity shares of ₹5 each and 39.23 crore partly paid-up equity shares of ₹5 each (paid-up value ₹1.25 each).

Reacting to the news, Bharti Airtel shares opened 1.5% higher at ₹772 against the previous closing price of ₹760.70 on the BSE. However, the telecom stock soon pared gains and declined as 0.5% to ₹756.5, while the market capitalisation stood at ₹4.22 lakh crore.

At the current levels, Bharti Airtel share price trades 14% lower than its 52-week high of ₹877.10 on touched on November 25, 2022. It hit a 52-week low of ₹629.05 on July 14, 2022. The telecom heavyweight has delivered a negative return of 1% in the last one year, while it shed 4% in the six-month period. In the calendar year 2023, the largecap stock has fallen nearly 7%, while it dipped 1% in a month.

In an exchange filing on March 30, Bharti Airtel announced the launch of WhatsApp Banking Services for Post Payments Bank (IPPB) customers to enable them to access banking services on their mobile phone. As per the company, it is the first telecom firm in the world that serves as a Business Service Provider (BSP) for WhatsApp.  

The WhatsApp messaging solution will be delivered to customers through Airtel IQ - a cloud communications platform as a service that enables brands to engage with their customers across voice, SMS and WhatsApp channels. Airtel has been working with IPPB to deliver as many as 250 million messages per month to the bank’s customers many of whom are located in mofussil towns and tier 2,3 cities.