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Bharti Airtel to consider share buyback

By Malini Bhupta
April 24, 2016 15:46 IST
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Bharti has been expanding its spectrum portfolio and now owns 4G data across all 22 circles in India

Bharti Airtel, country's largest wireless telecom player in terms of subscribers, is considering a final dividend, or a share buyback, or a combination of both for FY16.

"The board of directors of the company will consider recommend final dividend for the financial year ended March 31, 2016 or buy back of equity shares of the company or a combination thereof, in its meeting scheduled to be held on April 27, 2016," the company said in a filing to the BSE.

Shares of the company will get a boost if it undertakes a buyback. The market has been punishing telecom stocks over the past few months, as operational metrics have deteriorated and fears of heightened competition have increased risks. The move will be seen positively by investors as it suggests that promoters see value in the company.

Bharti has been expanding its spectrum portfolio and now owns 4G data across all 22 circles in India. This makes it the only incumbent which has the ability to take on Reliance Jio.

It may be recalled that the promoters of Bharti Airtel - the Mittal family and SingTel - are also looking to acquire an additional six per cent stake in the company for Rs 7,900 crore (Rs 79 billion).

The promoters will acquire the additional six per cent stake through Bharti Telecom, which currently holds 43.96 per cent in Bharti Airtel. The additional stake in Bharti Airtel will make the telco a subsidiary of Bharti Telecom. Both the Mittal family and SingTel are in the process of infusing Rs 2,500 crore (Rs 25 billion) equity capital into Bharti Telecom through a rights issue.

In a recent stock exchange filing, Singapore Telecommunications said it had subscribed to the rights offer of Bharti Telecom through its wholly-owned subsidiaries Pastel Limited and Singtel International Investments. The objective of the Rights Issue is to "enable BTL to acquire further equity shares of Bharti Airtel," said Singtel's filing.

Photograph: Reuters

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Malini Bhupta in Mumbai
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