Singtel plans another stake sale round in Airtel via block deals: Sources

Sources said that Singtel has a plan to equalise its share in the carrier with promoters Bharti Group over time.

Singapore’s telecom major Singtel may divest more stake in India’s second-largest carrier Bharti Airtel, people familiar with the matter said. In March, it sold 0.8 per cent to GQG Partners for Rs 5,849 crore.

Singtel's next round of share sales could see the Singapore telco sell equity worth as much as Rs 20,000 crore in one or more block deals.

The people cited said that Singtel has a plan to bring down its stake in the carrier over time to the same level as the promoters, the Bharti Group. Bharti Group’s current effective stake stands at 24.57%.

They added that Singtel is working with investment bank Morgan Stanley on the stake sale and while talks with prospective buyers were already ongoing, any block deal or deals are now likely to happen only after the company’s results for the first quarter of FY25, due to Sebi restrictions on share trading by promoters and key managerial people from the end of the quarter till 48 hours after the publishing of quarterly results.

Queries sent to Airtel, Singtel and Morgan Stanley didn’t elicit any response.

The GQG deal in March this year brought down the Singaporean telecommunications company's stake through direct and indirect holdings from 29.8 percent to 29 percent, currently worth an estimated S$33 billion.

Singtel, which has been a strategic investor in Airtel since 2000, previously in 2022 sold a 3.3 percent direct stake in Airtel for Rs 12,895 crore to Bharti Telecom, Airtel’s holding company.

Queries sent to Airtel, Singtel and Morgan Stanley didn’t elicit a response.

On Singtel’s divestment plan, Bharti Enterprises chairman Sunil Bharti Mittal in February this year told Moneycontrol it was Singtel’s requirement to equalise its stake with Bharti promoters.

“Bharti Telecom is 40 percent. I would want that to be the only vehicle holding all the stake in Airtel between us and Singtel. Singtel has some stake outside. We have some stake outside…The idea is to eventually bring it there or make some sales in the market so you do equalise. It’s their need, not ours,” he had said at that time.

Bharti Telecom, which held 39.37 percent in Bharti Airtel, as on March 31, 2024, is 50.56 percent owned by the Mittal family, while Singtel has a 49.44 percent stake in the holding company.

Singtel’s direct holding in Bharti Airtel stands at 9.56 percent, while the Mittal family owns a 4.53 percent direct stake through an entity called Indian Continent Investment Ltd.

For Singtel, the stake sales are part of a strategy started in 2021 to reduce debt and provide more value to shareholders through dividends besides funding the growth of its data centre and IT services.

By the end of September 2023, this approach has enabled Singtel to cut its net debt by S$3.2 billion and distribute S$0.8 billion in special dividends to shareholders from capital recycling.