Parent of Singtel associate Bharti Airtel seeks US$1b from share placement

[HONG KONG] The parent of Bharti Airtel is seeking about US$1 billion by selling a stake in the Indian mobile carrier after its share price hit a record on signs the years-long price war is about to end.

Bharti Telecom is selling 150 million Bharti Airtel shares at a floor price of 558 rupees (S$10.53) each, according to terms of the deal obtained by Bloomberg. That implies a discount of about 6 per cent to its close on Friday.

Shares of the Singtel Indian associate climbed to a record 598.8 rupees last week after it posted a 14 per cent increase in user revenue in the quarter through March. Investors have been betting the worst is behind the New Delhi-based operator as it faces fewer competitors than in the recent past.

The entry of billionaire Mukesh Ambani's Reliance Jio Infocomm in 2016 accelerated a consolidation in the market with a billion-plus subscribers - second only to China, forcing some to merge and a few to drop out. The shake-up has left Jio and Vodafone Idea as Bharti Airtel's only non-state rivals.

The deal is one of the largest follow-on offerings in India this year, data compiled by Bloomberg show. Bharti raised US$3 billion in January from the sale of shares and convertible bonds to help pay additional airwave and licence fees after telecom operators lost a court case.

JPMorgan India is the sole placement agent for the block trade.

BLOOMBERG