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Business News/ Companies / News/  Singtel sells 0.8% stake in Airtel to GQG Partners
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Singtel sells 0.8% stake in Airtel to GQG Partners

Singtel, which has been a strategic investor in Airtel since 2000, intends to equalize its share in the carrier with promoters Bharti Group over time

Following the sale, SingTel will retain an effective stake of 29% in Airtel, valued at approximately S$33 billion (Reuters)Premium
Following the sale, SingTel will retain an effective stake of 29% in Airtel, valued at approximately S$33 billion (Reuters)

New Delhi: Singapore’s telecom major Singtel sold a 0.8% stake in India’s second-largest carrier Bharti Airtel to American investment firm GQG Partners for S$0.95 billion or about 4,888 crore, the telco said in a statement on Thursday. The sale was done through its indirect wholly owned subsidiary, Pastel Ltd, which now holds 10.42% in the carrier.

Singtel, which has been a strategic investor in Airtel since 2000, intends to equalize its share in the carrier with promoters Bharti Group over time. With this trade, the effective stake of Singtel, through direct and indirect holdings will come down from 29.8% to 29%, which is worth an estimated S$33 billion. Bharti Group’s current effective stake stands at 24.57%. In 2022, Singtel sold a 3.3% direct stake in Airtel for approximately S$2.54 billion or 12,895 crore to Bharti Telecom, Airtel’s holding company.

“Airtel continues to see steady growth across all its businesses and has been rewarded with strong market valuations. We believe there’s more room for growth given India’s accelerated digital transformation and we intend to stay invested for the long term while working with Bharti Enterprises to equalize our effective stake in Airtel over time," Arthur Lang, Singtel Group chief financial officer said.

“We’re pleased to have raised S$0.95 billion, while adding a marquee name to Airtel’s share base," he added. Airtel’s shares closed at 1,199.15, up 0.44% on the BSE on Thursday.

GQG will become the latest investor into Airtel, following Google which invested $1 billion for a 1.28% equity stake in January 2022. Of the amount, $300 million was decided to be used over five years for multiple commercial agreements.

For Singtel, the stake sales have been part of a strategy initiated in 2021 to reduce debt and give shareholders more value from its holdings in the form of dividends. Since then, it has been able to reduce net debt by S$3.2 billion as of end-September 2023 and returned S$0.8 billion in special dividends to shareholders from capital recycling, contributing to cumulative dividends of S$5.2 billion paid out to shareholders since April 2022.

“Last November, we raised our dividend policy to between 70% and 90% of underlying net profit and are on track to pay at the upper end of that range this financial year, barring any unforeseen circumstances. We will look at actions to improve total shareholder returns via sustainably growing dividends and share price appreciation. We believe the current share price does not reflect the intrinsic value or growth potential of the Group," Lang said.

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Gulveen Aulakh
Gulveen covers both corporate and economy, and policy sections of Mint. She also covers telecom, IT from the corporate side and disinvestment, finance ministry from the economy side. Gulveen finds the rare mix of sectors she covers to be incredibly interesting.
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Published: 07 Mar 2024, 12:58 PM IST
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