It will subsequently raise foreign shareholding to over 85 percent in Bharti Airtel from 43 percent at present
Singapore-based telecommunications group, Singtel, may raise its stake in Bharti Telecom beyond 50 percent, reported The Economic Times.
This step will make the holding company a foreign-owned entity. It will subsequently raise foreign shareholding to over 85 percent in Bharti Airtel from 43 percent at present, the report stated.
Sunil Mittal family currently holds 52 percent and 41 percent stake in Bharti Telecom and Bharti Airtel, respectively. This will take away the ‘domestic’ tag from the holding company, leading to a reclassification as a ‘foreign’ investor.
Bharti Airtel has released the following statement with the stock exchange in response-
"In this regard, the Company would like to clarify that Bharti Telecom Limited (Promoter of Bharti Airtel Limited), in order to retire some debt may seek equity from its existing promoter group (which may include its overseas entities) and SingTel in proportionate to its holding. Even a marginal increase in foreign equity would take the foreign investment in Bharti Telecom above 50 percent making it a foreign owned entity. Once that happens, Bharti Telecom's entire stake in Bharti Airtel Limited will automatically be considered as Foreign Investment.""Bharti Airtel is committed to be compliant with regulatory regime for foreign investment and accordingly has applied for Foreign Investment for 100 percent to keep further headroom for FII / FPI investments as well."
Last month, Bharti Airtel sought government’s approval to increase foreign shareholding to 100 percent. This is being done to make way for potential future investors, apart from seeking investments from Bharti Telecom and Singtel, to revive growth.
Current Foreign Direct Investment (FDI) norms allow 49 percent foreign investment under the automatic route. But government’s approval is necessary if it is 50 percent or more.Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.
First Published on Aug 8, 2019 02:30 pm