Bharti Airtel share price is in focus as the company's Rs 21,000-crore rights issue opens today. The closing date of the issue is October 21, 2021. The issue size has been fixed as "up to 392,287,662 Rights Equity shares", the company said.
The rights issue price comes to Rs 535 per fully paid-up equity share, including face value of Rs 5 and premium of Rs 530 per equity share, Bharti Airtel said.
The rights entitlement ratio entails one equity share for every 14 equity shares held by eligible shareholders as on the record date.
The mega fundraising is bound to give more firepower to Airtel, as the company takes on rivals in the fiercely-competitive Indian telecom market.
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According to IIFL Securities, the partly paid rights issue is a good way to go long by lightening capital allocation. The company's party paid share is a deep in the money Call Option. Telecom sector has come out of a decade long consolidation, it said, according to a CNBC-TV18 report.
"The stock has given a multi-year break-out purely based on technicals. Passive funds will have to renounce their Bharti Rights entitlement," the brokerage firm said.
At 10:32 hours, Bharti Airtel was trading at Rs 688.90, up Rs 7.80, or 1.15 percent. It has touched an intraday high of Rs 694.25 and an intraday low of Rs 680.65.
It was trading with volumes of 4,210,202 shares, compared to its five day average of 750,204 shares, an increase of 461.21 percent.
The share touched its 52-week high Rs 738.79 and 52-week low Rs 386.79 on 24 September, 2021 and 19 October, 2020, respectively.
Bharti Airtel right issue opens today and will close on October 21, 2021, overall right issue size of Rs 21,000 crore. Earlier, the company fixed its record date of September 28, so shareholders would have received the right entitlement of Bharti Airtel right issue in the ratio of 1:14 shares which is for every 14 shares of Bharti Airtel shareholders will get the 1 entitlement of Bharti Airtel Rights at a price of Rs 535. With rights entitlement, shareholders have two options, to apply for the right issue by paying the first installment of Rs 133.75 or to sell their right entitlement on exchanges which is trading at Rs 204.5. Those shareholders who are not planning to apply for the right issue should sell their entitlement, said Yash Gupta, Equity Research Analyst at Angel One.
"We are expecting Bharti Airtel RE to come down as we expect some selling pressure from passive mutual funds as they cant hold partially paid-up shares," he added.Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.