Qatar Foundation sells 5% stake in Bharti Airtel for Rs9,600 crore
New Delhi: Qatar Foundation, a non-profit run by the gas-rich country’s royal family, Wednesday sold its entire 5% stake in India’s largest telecom operator Bharti Airtel for about Rs9,600 crore.
Three Pillars Pte, an affiliate of Qatar Foundation Endowment, sold 19.98 crore shares in Bharti Airtel via an open market sale. Three Pillars’ representative on board of Bharti Airtel will step down immediately post settlement of the sale, a statement by Qatar Foundation said.
The proceeds of the share sale amounts to about Rs9,600 crore and will be reinvested across Qatar Foundation Endowment’s global portfolio. “The proceeds of the share sale will be reinvested as part of the QFE Group’s ongoing global portfolio growth and diversification, as it seeks to generate long-term financial returns by investing across a range of asset-classes, industries and geographies,” the statement said.
The block trade was priced at Rs481 per share, a discount of 6.4% to Tuesday’s closing price of Rs514.35 on the BSE. However, the sale has resulted in windfall gain for QFE which had paid Rs340 apiece in 2013 for acquisition of the shares.
“We are delighted to have partnered with Bharti Airtel though an important stage of their growth. Bharti Airtel has successfully maintained its market-leading position, and its positive momentum has led to our investment performing well,” Rashid Al-Naimi, chief executive officer of QFE said.
UBS acted as sole bookrunner on this transaction.
The buyers included a mix of foreign and domestic institutional investors, said a person who did not wish to be named. The company now holds nil shares in Bharti Airtel. A Bharti Airtel spokesperson declined to comment on the stake sale by the Qatari investor.
Qatar is redeploying resources to bolster the economy and banking system after Saudi Arabia, the United Arab Emirates and Bahrain cut diplomatic ties over charges of funding terrorism. Qatar has repeatedly denied the allegations.
Qatar Foundation Endowment had acquired the 5% equity stake in Bharti Airtel for Rs6,796 crore way back in 2013. The stake sale coincides with similar moves by other Qatar-based investors who are paring their holdings in various foreign companies in the backdrop of sanctions imposed by Arab countries.
The stake sale also comes at a time when the Indian telecom market has seen an intense tariff war triggered by the 2016 entry of aggressive newcomer Reliance Jio, backed by billionaire Mukesh Ambani. The competition in the mobile services market has hit earnings and the financial metrics of large established telecom players and led to a massive consolidation in the industry, with smaller players exiting the market, and others either joining hands or going on a acquisition spree to protect their turf.
On Wednesday, Bharti Airtel shares fell 3.73%, or Rs19.20, to Rs495.15 while the benchmark Sensex shed 0.46%, or 151.95 points, to end the day at 33,218.81.