Airtel mops up $2 billion at issue price of Rs 445 per share as part of QIP

Issue price was at a discount of 1.57% to the stated floor price of Rs 452.09 per equity share

Bharti Airtel on Wednesday announced allotment of 323.5 million equity shares to eligible institutional buyers at an issue price of Rs 445 per share as part of US$ 2 billion (around Rs 14,000 crore) qualified institutional placement (QIP) that closed on Tuesday.

The issue price was at a discount of 1.57 per cent to the stated floor price of Rs 452.09 per equity share. Airtel announced the closure of this issue period for the qualified institutional placement (QIP) and fixed the issue price at “Rs 445 per equity share, which is at a discount of 1.57 per cent to the floor price of Rs 452.09 per equity share”.

The firm is raising funds to make payments towards its adjusted gross revenue (AGR) liability.

The net proceeds of the funds raised will primarily be used to augment the company’s long-term resources and strengthen balance sheet, servicing and/or repayment of short-term and long-term debts, capital expenditures, statutory dues, long-term working capital requirements, and general corporate purposes as permitted under applicable laws, the company said.

“Despite a volatile market environment and challenging global macroeconomic conditions, the offering witnessed a strong response from global and domestic investors. This underlines Airtel’s growth oriented financial performance and future growth potential of our business and the sector,” Harjeet Kohli, group director, Bharti Enterprises, said. Bharti Airtel has to pay about Rs 35,586 crore in additional statutory dues, as a result of a Supreme Court ruling in October on AGR liabilities of telecom companies.

Earlier this month, the firm’s shareholders approved proposals to raise $2 billion in equity and another $1 billion in debt.

Fundraising exercises

Airtel announced the closure of this issue period for the QIP and fixed the issue price at “Rs 445 per equity share, which is at a discount of 1.57 per cent to the floor price of Rs 452.09 per equity share”.

The equity shares are being allotted to eligible qualified institutional buyers, the company said in a regulatory filing. The special committee of directors for the fundraising exercise also cleared the terms of foreign currency convertible bonds (FCCBs), including the issue price.

“FCCBs due in 2025, convertible into fully paid-up equity shares of face value of Rs 5 each of the company at a price of Rs 534 per conversion to equity share to the initial purchasers subject to receipt of funds, satisfaction of other conditions precedent and settlement as per applicable laws and procedures and relevant agreements," the filing said.

Axis Capital, Citigroup Global Markets India, and JP Morgan India acted as global coordinators and bookrunning lead managers, and, Goldman Sachs (India) Securities, BNP Paribas, DSP Merrill Lynch, HDFC Bank and HSBC Securities and Capital Markets (India) were the bookrunning lead managers for the QIP issue and Goldman Sachs (Asia) L.L.C., Barclays Bank PLC.

The FCCB offering re-opened the Indian market after a 3-year absence of such issuances, the company said.