Singtel is in talks to sell some of its stake worth $1-2 billion in Bharti Airtel, India’s second largest telecom operator.
Singtel currently owns 49.44% in Airtel’s parent company, Bharti Telecom, and its effective stake in Bharti Airtel is 31.72%.
The Mittal family own 50.56% stake in Bharti Telecom and its effective stake in Airtel is 24.13%.
According to a report by the Economic Times, Singtel is looking to sell 2-4% stake to Airtel’s Indian promoter, Mittal, through a mix of Bharti Telecom and Bharti Airtel share sales.
Notably, the Indian telco’s stock has performed well in the last one year, having appreciated by 33%. The report added that Singtel, a shareholder in Airtel since 2000, was keen to book some profit as part of its portfolio management strategy by selling Bharti shares and redeploying some capital in new investment opportunities.
In March this year, Singtel monetised a partial stake in Airtel Africa as part of its capital recycling strategy. It is firming up its plans to invest in digital service companies across financial services, streaming and gaming segments in the entire Southeast Asia region in a bid to capitalise on emerging opportunities and to look beyond traditional telecom business.
However, Singtel Group CEO Kuan Moon Yuen recently termed Airtel as a “bright spot” in the company’s business.
As part of its strategic reset, Sintel has started investing in companies. It recently picked up a 40% stake in a digital banking joint venture with Singapore’s Grab, which has received a licence to operate in Singapore.
“We’ve been strategic investors in Airtel for decades and it remains a core investment in our international portfolio. We have not hired a bank to explore such a sale and we will not comment on any market speculation. We abide by market disclosure rules to report all material transactions,” Singtel said in a statement to the publication.
Interestingly, an analyst had asked Airtel CEO Gopal Vittal about an “Airtel promoter entity” mulling a stake sale, terming it as a “fresh market rumours” during last week’s investor call.
Vittal declined to comment on the question and said that, “this was a shareholder matter that is best directed to them.”