Capital market regulator Securities and Exchange Board of India (Sebi) has approved Bharti Airtel's upcoming Rs 25,000 crore rights issue, suggested media report. This would allow Bharti Airtel, the country's second-largest telco, to raise funds to strengthen its balance sheet and get financial flexibility to take on Mukesh Ambani's Reliance Jio.
The SEBI has given green signal to the rights issue of Airtel, sources closed to the development told news agency PTI.
Last month, Airtel's board had approved plans to raise Rs 32,000 crore through equity and bond sales. The fund-raising plans entail rights issuance of up to Rs 25,000 crore and Perpetual Bond with equity credit of up to Rs 7,000 crore.
The company had also informed that its promoters would take part in rights issue plan with Singapore Telecommunications (Singtel) will be subscribing 17 crore shares in the Airtel's for a total consideration of Rs 3,750 crore, while Singapore government's investment arm GIC will be subscribing to shares worth Rs 5000 crore.
"The entire rights entitlement of promoter and promoter group of approx. Rs 167,85.7 crore will be subscribed by them and GIC, with promoter and promoter group subscribing to Rs 11,7,85.7 crore and GIC subscribing Rs 50,00 crore by way of renouncement in their favour," Airtel had said in a filing to the exchange.
"The Rights Issue reiterates the confidence of our shareholders in the competitive strength and sound business strategy of Airtel. It shall further strengthen our balance sheet with desired financial flexibility so as to meet future opportunities, particularly in the rapidly transforming Indian mobile market," Gopal Vittal, MD and CEO (India & South Asia) - Bharti Airtel, had said in the statement.
As on December 31, 2018, the net debt of Bharti Airtel stood at Rs 1. 06 lakh crore.
Recently, the board of Vodafone Idea approved the planned Rs 25,000-crore rights issue at a price of Rs 12.50 per equity share.
Edited by Chitranjan Kumar