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Bharti Airtel’s Rs 25,000 crore rights issue oversubscribed

NEW DELHI: Telecom operator Bharti Airtel said on Friday that its about Rs 25,000 crore rights issue has been “over-subscribed” as per the preliminary information received.

The company’s rights issue, which had opened on May 3, closed for subscription on Friday.

“The company would like to bring to your notice that, based on preliminary information received, the rights issue has been over-subscribed,” the company said in a regulatory filing.

The applications received in the rights issue are subject to verification and clearing of payments, and finalisation of the basis of allotment, it added.

Airtel had announced the rights issue to raise up to Rs 25,000 crore through issuance of fully paid-up shares at a price of Rs 220 per share, and additional Rs 7,000 crore through a foreign currency perpetual bond issue.

The company had said the capital infusion will help it continue investments in future rollouts to build large network capacity and create content and technology partnerships to ensure the strong customer experience.

The company had previously also received commitment from its single-largest shareholder Singtel, promoters, and GIC Singapore to participate in the Rs 32,000-crore fundraiser.

Singapore telecom major SingTel said it will infuse Rs 3,750 crore in Bharti Airtel by subscribing to the rights issue of the company, while GIC, on behalf of Singapore government and the Monetary Authority of Singapore, had made a commitment of Rs 5,000 crore in the proposed plan.

While the offer price was fixed at Rs 220 per share, the Bharti Airtel scrip ended at Rs 328.20 apiece on the BSE, 0.84 per cent higher than the previous close. Sources pointed out that the company’s ex-rights price in the market continues to trade at a high premium to rights price.

Earlier this month, Bharti Airtel reported a surprise 29 per cent surge in March quarter net profit as exceptional income gains and Africa business helped offset losses in India mobile services operations.

The company — whose profitability has been battered by intense price competition posed by richest Indian Mukesh Ambani’s Reliance Jio — earned a net profit of Rs 107.2 crore in January-March against Rs 82.9 crore it earned in the same period of the previous fiscal. This marked the first rise in profit after several quarters for the company.

Its revenue soared 6.2 per cent to Rs 20,602.2 crore for the three months ended March 31, 2019.

News credit : Indiatimes