Telecom operator Bharti Airtel is planning to raise Rs 21,000 crore ($2.84 billion) through a rights issue, according to a regulatory filing. The company will issue 392.29 billion shares at the price of Rs 535 per share, including a premium of Rs 230.

A special committee of directors has fixed October 5 as the issue opening date and October 21 as the closing date. Also, the telco has approved September 28 as the record date for rights entitlement in the issue. The rights entitlement ratio entails one equity share for every 14 shares held by eligible shareholders as on the record date.

The proceeds from this rights issue will be used to invest in 5G technology.

Meanwhile, telecommunications company Singtel, which holds a 14 percent stake in the company, has announced that it will subscribe to its portion of the rights issue, costing it $405 million. Singtel has said that its participation in the rights offering reflects its confidence in Airtel's growth prospects.

At present, promoter holding in Bharti Airtel is about 55.8 percent while the public holds 44.09 percent.

The company board had first approved the plan to raise up to Rs 21,000 crore via rights issue on August 29. The rights issue is expected to give Airtel a boost and help the company take on rivals in the highly competitive Indian telecom market.

Recently, international ratings agency S&P had upgraded Airtel's outlook from negative to stable. Besides, it maintained Bharti Airtel's credit rating at "BBB-", which implies that it is an entity that has adequate capacity to meet financial commitments but is subject to adverse economic conditions. As per S&P analysis, Bharti Airtel's Indian mobile average revenue per use (ARPU) growth is likely to pick up.

Sunil Mittal-led Bharti Airtel is the second-largest company in the three private player market and its net debt, at the end of the April-June 2021 quarter, was over Rs 1.59 lakh crore.

According to the recently released subscriber data by TRAI (telecom regulator), Airtel added 38.1 lakh wireless subscribers in June, pushing up its mobile user base to 35.2 crore.

Earlier this month, the Centre announced a series of reforms to boost the telecom industry, including a four-year moratorium on all dues, the option to convert interest on dues to equity, and waiver of spectrum usage charges in all future spectrum auctions, among others.

(Edited by : Anshul)

First Published:Sept 23, 2021 10:29 AM IST