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Bharti Airtel on Tuesday withdrew plans to change its corporate structure aimed at housing all digital assets under the listed entity, saying it is well placed with a strong balance sheet and 5G-ready network to invest aggressively in growth opportunities in India.

The withdrawal follows the reforms package announced by the government in September, which provided much-needed relief for the telecom sector, and significantly boosted investor confidence in the industry while simplifying the licence framework.

“The board of directors of Airtel is of the view that the existing corporate structure of the company is, therefore, optimal for leveraging these emerging opportunities and unlocking value, while continuing to scale up Airtel’s digital businesses. Therefore, the scheme of arrangement for the new corporate structure announced on April 14, 2021 stands withdrawn," India’s second largest telecom services provider said.

Experts said that the move was in sync with the carrier’s financial position, which has improved drastically over the past few quarters.

“It’s an acceptance of the fact that the government’s reforms to address liquidity issues have worked. Airtel is in a sweet spot; spectrum-related issues have been resolved, market share has increased, debt position has improved and ARPUs are set to double and the payments bank is doing extremely well, so there’s no need for a structural change now. The share price should touch 900 this year," said Sanjiv Bhasin, director at IIFL Securities. He said the merger of the optic fibre subsidiary will be an added advantage, which could now be another vertical for Airtel.

Airtel had reported a net profit of 1,134 crore for the quarter ending 30 September 2021 as against a loss of 763 crore in the September quarter of 2020.

Profit in the September quarter was 300% more than 283 crore in the June quarter.

Last month, Airtel paid up 15,519 crore to the government as pre-payment of the entire liability of spectrum it acquired in 2014 auctions, when it acquired 128.4 MHz spectrum for 19,051 crore.

Bharti Airtel’s shares closed at 697.2, up 0.87% on Tuesday, at the BSE.

ABOUT THE AUTHOR

Gulveen Aulakh

Gulveen Aulakh is Senior Assistant Editor at Mint, serving dual roles covering the disinvestment landscape out of New Delhi, and the telecom & IT sectors as part of the corporate bureau. She had been tracking several government ministries for the last ten years in her previous stint at The Economic Times. An IIM Calcutta alumnus, Gulveen is fluent in French, a keen learner of new languages and avid foodie.
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