Airtel drops 4% on Qatar Foundation's $1.5-bn exit

Shares of Bharti Airtel ended 3.7 per cent lower on Wednesday after Qatar Foundation, a nonprofit run by the gas-rich country’s royal family, sold its 5 per cent holding in the telecom major.

Shares of the company declined as much as 6.7 per cent to Rs 480 during the day. The stock, however, recovered marginally to close at Rs 495, down Rs 19.2, or 3.7 per cent, from Tuesday’s close. Shares worth Rs 13,528 crore changed hands on the BSE and another Rs 2,237 crore on the National Stock Exchange (NSE).

Three Pillars, an affiliate of Qatar Foundation, sold its entire 5 per cent holding for Rs 9,613 crore ($1.48 billion). It sold a total of 199.87 million shares at Rs 481 apiece, data provided by the BSE showed. Among the buyers were Merrill Lynch and UBS, who bought 22.9 million and 24.75 million shares, respectively.

The price band for the block deal was set at Rs 473 to Rs 481 a share, a discount of 4.7 per cent to 8 per cent over the stock’s closing price of Rs 514 on Tuesday. Three Pillars acquired the Bharti Airtel stake for Rs 340 a share in May 2013. UBS Group was the investment bank that handled the share sale.

 

It was the largest block traded in the domestic market since $3.2-billion share sale by Japan’s Daiichi Sankyo in Sun Pharmaceutical Industries in April 2015.

Last week, promoter Bharti Telecom had increased its holding in Bharti Airtel by 4.62 per cent to 50.1 per cent. It bought the stake from Indian Continent Investment, a foreign portfolio investor (FPI), for about Rs 9,600 crore.

On a spree to liquidate overseas investments

Qatar had to redeploy some of its foreign assets to bolster the local economy and banking system after Saudi Arabia, the United Arab Emirates, and Bahrain cut diplomatic ties on June 5 and withdrew deposits, accusing the sheikdom of funding terrorism. Qatar has repeatedly denied the charges.

The country’s $320-billion sovereign wealth fund, the Qatar Investment Authority, has reduced its direct holdings in Credit Suisse Group AG, Rosneft PJSC, and Tiffany & Co in recent months. Qatar has also made some acquisitions since June, most notably Qatar Airways’ purchase of a 9.6 per cent stake of Hong Kong-based Cathay Pacific Airways, a deal valued at $662 million.

Qatar Foundation built branch campuses for Cornell, Northwestern, Georgetown, and other US universities, and its endowment includes 27 per cent of Vodafone Qatar and a property development unit that will eventually host most of the financial firms in Doha.

(With inputs from Bloomberg)