Bharti Airtel’s board has approved plans to raise more funds, upto Rs 7,500 crore, via debt to build a war-chest even as India’s second-largest telco needs cash to buy spectrum in the upcoming 4G auction, invest in networks besides pay statutory dues, among other needs.
“The board of the company, in its meeting on February 3, reviewed the company’s routine financing/ re-financing strategies, including any market maturities in due course, and approved raising of funds as and when deemed appropriate, vide issuance of secured/unsecured, listed/ unlisted non-convertible debt securities including debentures, bonds etc upto Rs 7,500 crore (or in equivalent foreign currency) in one or more tranches from time to time, within the limits of Section 180(1)(c) of the Companies Act, 2013 and subject to all regulatory/ statutory approval(s),”
said in an exchange filing Wednesday evening.
The Airtel board also authorised a special committee of directors to decide, basis market conditions, “on all matters related to the aforesaid issuance of securities, including but not limited to the finalisation and approval of the detailed terms & conditions, quantum of tranche(s) and timings of the issue”.
Airtel’s latest fundraise plans come on a day India’s second-largest telco returned to the black, posting a net profit of Rs 854 crore in the December quarter after six straight quarters of losses, on the back of a one-time gain related to the recent merger of Bharti Infratel and Indus Towers and strong addition of data users which led to record revenue.
Airtel also added 14.2 million users – the most in four quarters – and subscribers moved to higher-paying plans, helping drive up average revenue per user (ARPU) to a three-year high of Rs 166, from Rs 162 in July-September.
Airtel shares rose 1.53% to Rs 608.80 at close on the BSE on Wednesday, while the benchmark Sensex gained 0.9%.
Airtel has already raised some $8 billion in the last couple of years. The latest fund raise plans come after the telco recently demonstrated live 5G services on its 4G network using the 1800 Mhz band and said it can commercially launch 5G with existing 4G airwaves in a few months, taking the battle over the next-generation services headlong with rival Reliance Jio.
But for this, the operator may need to buy additional spectrum during the upcoming airwaves auction in March. Over and above these expenses, Airtel also owes the government nearly 26,000 crore as adjusted gross revenue (AGR) dues.