Analysts positive on Singtel unit’s S$1.5 billion Bharti Airtel sale
Separately, Singtel and KKR are in talks to acquire all of ST Telemedia Global Data Centres they do not already own for more than S$6.4 billion
[SINGAPORE] Analysts were positive on a Singtel unit’s sale of S$1.5 billion worth of Bharti Airtel’s shares last week, they said in notes on Monday (Nov 10).
Singtel’s wholly owned subsidiary Pastel sold 0.8 per cent of its stake on Friday at 2,030 rupees a share, which was about a 3.1 per cent discount to Airtel shares’ closing price the previous day.
RHB noted that this was the second such sale in the 2026 financial year, with the Singtel unit having sold 1.2 per cent of Bharti Airtel in May for about S$2 billion. It was the fourth such sale in as many years.
“The disposal is consistent with management’s prior guidance of equalising its stake with that of the Mittal family over time,” said RHB, with a target price of S$4.90.
CGS International analyst Prem Jearajasingam said that Singtel could raise S$13.1 billion downsizing its Bharti stake from the current 27.5 per cent to match the Mittal family’s stake in Bharti of 19.9 per cent. This is assuming the remaining direct stake of family is sold, he said.
Jearajasingam maintained an “add” call, with a target price of S$4.80.
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Maybank analyst Hussaini Saifee said that the pace of the sale and tight 3.1 per cent discount “surprised positively” and maintained potential for a further S$8 billion in sales.
“This in turn gives quite a credence to potential future divestments in Airtel without taking a material haircut,” said Saifee, who kept a target price of S$4.62 and maintained a “buy” call.
Separately, Singtel and KKR are in talks to acquire all of ST Telemedia Global Data Centres (STT GDC) they do not already own for more than S$6.4 billion.
“While it is a bit early to quantify the synergies, data centre demand globally remains resilient while Singtel has a proven track record of building and operating data centres,” said Saifee.
DBS group research suggested that the proceeds from the Bharti Airtel stake sale could be used to fund the remaining 80 per cent stake in STT GDC.
“Tactically, we see limited near-term upside for now, with the stock more likely to turn sideways (or pullback) in the foreseeable future,” added DBS, noting its all-time high on Friday, and removing the stock from its blue chips equity picks.
Saifee said that Singtel may have to pay about S$3.1 billion for a 22 per cent stake in STT GDC, assuming Singtel and KKR acquire the remainder of the data centre operator at its 2024 valuation of S$16 billion while retaining the same proportionate share.
CGSI’s Jeararjasingam estimated that Singtel would have to fork out more than S$1.1 billion for its share at the reported valuation of more than S$5 billion, assuming the stake in STT GDC is maintained at the same ratio (of about 22 per cent) as its initial investment with KKR.
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