Bharti Airtel on Tuesday pested 83 million shares of its subsidiary Bharti Infratel for Rs 3,325 crore through secondary share sale in the stock market. The sale was executed at a price of Rs 400.6 per share, offering a discount of 3.6 per cent to the previous day's closing price. Bharti Airtel, country's largest telecom operator, will primarily use the proceeds from this sale to pare its debt, the company said in a BSE filling.
Following the closure of this transaction, Bharti Airtel and its wholly owned subsidiaries together have an equity holding of 53.51 per cent in Bharti Infratel. Airtel's consolidated debt stood at Rs 91,480 crore as on September 2017.
The sale was carried out by Airtel via its wholly-owned subsidiary, Nettle Infrastructure Investments. Announcing the "successful pestment" of 83 million shares of subsidiary Bharti Infratel, the company said: "The sale was for a total consideration of over Rs 3,325 crore ($510 million) and was executed at a price of Rs 400.6 per share, representing a discount of 3.6 per cent to the previous day's closing price." The allocation was done to global investors, fund managers and long-only funds, including many repeat investors, it said, adding that the deal was upsized by over 25 per cent.
Meanwhile, Bharti Airtel's net profit for the July-September quarter plunged by a whopping 77 per cent from a year earlier, as it struggled with the fierce price war unleashed by Mukesh Ambani-led Reliance Jio. Airtel net profit for the second quarter was whittled down to a mere Rs 343 crore from a robust Rs 1,461 crore in the July - September quarter of 2016-17.
Airtel's second quarter net profit is its smallest in 19 quarters and its sixth consecutive drop in quarterly profit. Indian telecom operators have been hit by the entry of Reliance Jio, which has been offering free voice calls and data at dirt-cheap prices. The sector faces further price pressure after Trai recently cut the fee operators pay each other for calls made from one network to another.