Airtel shareholders ok plan to raise Rs 3,000 crore via bond issue

Shareholders of Bharti Airtel have approved the telecom operator's plans to raise Rs 3,000 crore by selling corporate bonds for their treasury operations. This is part of the Rs 16,500 crore that the Sunil Mittal owned company will raise through debt, including a fresh issue of $1 billion in overseas bonds, to help refinance loans and pay for spectrum.

The Committee of the directors of the company have approved of the allotment of 30,000 listed, unsecured, rated, redeemable, non-convertible debentures at face value of Rs 10 lakh each, said Airtel in its regulatory filing on Wednesday. “The proceeds of the Issue will be used for general corporate purpose including routine treasury activities of refinancing of existing debt and spectrum liabilities etc,” said the company.

Shares of the operator traded at Rs422.50, down by 0.80% on the BSE on Wednesday. The funds, to be raised over a period of time, will help shore up the balance sheet of India’s largest telecom company striving to fight off brutal competition from Reliance Jio Infocomm, which has severely dented revenue and profit.

ET had reported earlier that , Airtel’s preference to raise funds through debt is possibly triggered by the fact that equity financing is more expensive, coupled with the fact that the equity raising process itself is more cumbersome.

Banks, cautioned by the Reserve Bank of India, have been wary of lending to a sector that’s burdened with debt of almost Rs 8 lakh crore amid competition that has forced smaller telcos to exit the business and some to head for bankruptcy


Bharti Airtel has so far “issued or guaranteed issuances of multiple long-dated bonds across the US dollar, Euro and Swiss franc to raise the equivalent of $6.2 billion,” according to the telco’s website. These bonds are spread across maturities ranging from five to 10 years.


Over the past year, Airtel has raised almost Rs 12,089 crore by progressively reducing its stake in its listed tower unit, Bharti Infratel, to cut debt and free up cash and gird up for competition with Jio. The company said recently it may sell a much larger stake in Bharti Infratel, in which it owns 53.51%.


SingTel invested Rs 2,649 crore recently in the company, which plans to spend Rs 25,000 crore in this financial year to expand 4G operations.