Bharti Airtel looks to raise Rs 3,000 crore as 5G installment deadline ends today: Report

Bharti Airtel

Bharti Airtel plans to borrow up to Rs 3,000 crore from the local money market to pay the government for the 5G airwaves it bought in the recently concluded auction, according to a report.

Commercial papers (CPs) with maturities up to 12 months are being sold by the telecom operator, according to the people aware of the matter, the Economic Times reported, citing three sources.

SBI Mutual Fund is believed to have agreed to buy over Rs 1,000 crore of Airtel's debt, and it will likely buy CPs maturing in February of next year at 6.53 percent, the report said.

At India's first 5G auction that ended earlier this month, Sunil Mittal's Airtel purchased a spectrum worth Rs 43,084 crore. If Airtel opts to pay for the 5G spectrum in 20 equal annual instalments, its first tranche would be Rs 3,848 crore, to be paid to the Department of Telecommunications by August 17, according to notices put up on the DoT website. It is widely expected that the carrier would opt for such a payment mechanism, the report added.

“Airtel is in talks with leading mutual funds, and global and local banks as they have approached large institutions," ET quoted one of the three people as saying.

The short-term loan is expected to be refinanced at the end of the maturities, the people said.

A person familiar with Vodafone Idea's plans said the cash-strapped operator is also in talks with a clutch of public sector banks about raising around Rs 1,600-1,700 crore, as quoted by the ET.

In response to a request for comment, Airtel, SBI MF, and Vodafone Idea did not respond by press time, as per the report.

Barclays, Citi, BNP Paribas, State Bank of India and other large public and private banks have been approached by Bharti Airtel. Barclays, BNP Paribas and Citi declined to comment, while SBI didn't reply to ET’s queries.
Vodafone Idea, meanwhile, has to pay Rs 1,679 crore as the first instalment.

Shares of Airtel closed 0.85 percent lower at Rs 703.80 on Tuesday on the BSE, while those of Vodafone Idea ended 1.49 percent higher at Rs 8.84.

Airtel has announced plans to roll out 5G services using the non-standalone mode and is targeting a pan-India rollout by March 2024. The company’s chief executive, Gopal Vittal, recently said 5G coverage plans were ready for some 5,000 cities and towns.

Market leader Jio was the biggest spender in the recent 5G auction, buying airwaves worth Rs 88,078 crore, followed by Airtel and Vi that spent Rs 18,799 crore.

"Airtel keeps raising funds across business purposes as money is fungible," another person cited said. A banker said the telco was a clean credit as it had the potential to grow.

India Ratings graded Airtel’s proposed CPs at A1+, a standard rank. "Airtel’s spectrum footprint would strengthen through the acquisition of the right to use the 5G spectrum bands,” the ratings firm said on July 27.

Disclaimer: Moneycontrol could not independently confirm the news development.

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