It's a fight to the finish line in the telecom sector.
After Reliance Jio's aggressive strategy to capture market share, Bharti Airtel is building a war chest to take on the competition. Bharti is in talks with a large investor to infuse funds into Airtel.
CNBC-TV18 learnt from sources that Bharti Airtel's talks with Japan's SoftBank for selling a minority stake through issuance of fresh equity are in initial stages. The proceeds will be used to take on competition from the new entrant in the telecom space as Airtel tries to maintain its number one position in the telecom space.
The promoters currently own 30 percent stake in the company, while Singtel holds around 36 percent through direct and indirect holdings.
SoftBank has an existing investment in Bharti Group ventures Hike Messenger app and the group’s renewable business.
Nitin Soni, Director-Asia Pacific TMT at Fitch Ratings said that such equity stake sale would help the company bring down debt, which will be viewed as positive by the market.
The company needs the funds to strengthen its network in future. The company was able to navigate through the intense competition in the telecom space and invest about USD 3 billion on capital expenditure every year, says Soni.
SoftBank has been on an acquisition spree throughout the globe with the acquisition of London-based ARM Holdings and has stake in the US-based Sprint Nextel. It also runs a telecom venture in Japan with the purchase of Vodafone Japan.
Disclaimer: “Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.”
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