Bharti Airtel plans to list its Africa unit in London to raise Rs 6,976 crore ( $1 billion) which will be used to pare the telco's debt. Currently, Bharti Airtel has nearly Rs 1.11 lakh crore debt on its books.
The initial public offering (IPO) will comprise issue of new shares and the sale would seek a free float of at least 25%, the company said.
Airtel Africa is likely to be listed on London Stock Exchange in June, according to a report by Bloomberg. Last year, Airtel Africa raised Rs 8,714 crore ($1.25 billion ) last year from investors including Temasek Holdings Pte and SoftBank Group Corp, assigning it an equity value of about $4.4 billion.
"The main motivation is the debt level at the parent," said John Davies, an analyst at Bloomberg Intelligence. The "rights issue, talk of selling towers plus this IPO are all consequences of that." Airtel is ranked second in the Africa market behind Johannesburg-based MTN Group with nearly 100 million subscribers across 14 countries including Nigeria, Kenya and Tanzania.
A successful IPO will help the company kickstart a "stronger growth phase" in Africa, Bharti Airtel Chief Executive Officer Raghunath Mandava said.
The company is also considering a local listing in Nigeria, according to the IPO filing. Sunil Mittal-led Bharti Airtel has been affected by cheap tariffs of Reliance Jio, telco owned by billionaire Mukesh Ambani.
Bharti Airtel's mobile subscriber base was recorded 325.1 million in February. However, rival Reliance Jio was 306.7 million as on March 2019 against 297.2 million in February. The Mukesh Ambani-led telecom witnessed a rise of 9.5 million in a month..