Investors in India’s third largest corporate entity—Bharti Airtel— will have to wait some more years before they can expect the maiden dividend, with group chairman Sunil Mittal saying that investments being pumped into the company will continue to outpace earnings.
“The fact is that the most successful telecom company in India is still not cash-flow positive. This is the fact that nobody knows, and the fact that nobody remembers,” Mittal said.
“We have not given dividend precisely because we are spending more than we are earning,” he said, complimenting the investors for their maturity. On whether investors still have confidence in Bharti and when he expected to turn cash- flow positive, Mittal said: “Yes, they (investors) do understand telecom business. As far as turning cash-flow positive, I hope, we still continue to grow at rapid fire and if we continue to grow at this rate, we will still carry on like this.”For a company of the size of $30 billion, paying small dividend may not mean anything. “They (shareholders) would rather have us invest more and create value,” he said.
The shares of Bharti Airtel, changing hands at about Rs760, have given more than 100% returns over the last 52 weeks and the company has among the top few slots to have given this kind of rewards to its investors or shareholders.