Had been tracking BT for 4-5 years, deal made in 2 weeks: Shravin Mittal

He tells that his investment firm unbound will soon become a billion dollar venture

Fresh from the major announcement of acquiring a quarter share of Britain's legacy telecom provider BT, Bharti Global's Managing Director Shravin Bharti Mittal says the mandate is to make strategic investments in assets that can compound over generations. He tells Subhayan Chakraborty & Nivedita Mookerji in a virtual interaction that his investment firm Unbound will soon become a billion dollar venture. Edited excerpts:

Can you take us through the journey you undertook towards securing the stake in BT?

I remember speaking to our chairman (his father Sunil Bharti Mittal) about BT maybe four or five years ago when the stock was at 1 pound, and very shortly thereafter, it ran up to 2 pounds. We had thought the opportunity had gone for us to get a sizeable chunk of this company, and decided to just keep monitoring this business, as we do with other investments.

How long did it take to close the deal?

The seller approached us and given our history with BT, we were aware of the benefits of making this investment. When that opportunity came to us a couple of weeks ago, we moved really fast. I think we've done this entire deal end to end in may be two or two and a half weeks.

What was the toughest part of striking this deal?

It was getting our heads around the regulatory approvals that are needed for a unique asset like BT….

Can you elaborate on financing of the $4-billion deal with BT?

The deal is fully funded through our balance sheet, as a mix of equity and debt, as we've disclosed.

From Harvard and Softbank to Unbound and Bharti Global, is this how you had planned it out for yourself?

I definitely wouldn't have planned this journey. My journey has see-sawed quite a bit. I've been in the world of finance for many years. I majored in finance in my undergrad days, I was an investment banker with JP Morgan, and did sales and trading with Merrill Lynch. I was actually part of the telecom business when we acquired Zain in Africa for two years, and was part of the team that launched 3G in India in 2012 before I went to the business school.

I've done a variety of different roles. But one thing was very clear, that at the right time I would do something of my own, and Unbound was that something of my own.

What is next for you and Bharti Global?

Bharti Global will right now consolidate around this investment. It's a very sizeable investment, being the largest one we've done from the family investment arm. Unbound is slightly different. The investments are in earlier stages, we are a little bit more risky in our investments, and more in growth equity. We're looking at companies in enterprise, software and financial services. Historically, we've done logistics and healthcare. At Bharti Global, we want to take large strategic positions. At Unbound, we want to invest in the up and coming, disruptive generational businesses. And those two elements have to work together really well.
 

What is Bharti Global's ambition?

I'm a big believer in long-term compounding. For me, the only thing that really matters is to invest in assets that have generational outcomes that can compound capital over a long period of time. BT is a big one for us. We will just consolidate around this investment for the time being.

What about Unbound?

This has been a very heavy summer for me. We are on deal number six. The Unbound ones are a lot smaller in size than the BT one. But Unbound has been busy backing our top four or five businesses, and increasing our ownership…. Unbound will soon be a billion dollar enterprise in its own right.

Were there misses in your investing journey?

At Bharti Global, it's a very clear and simple mandate, to invest in industries that we understand. More hits and misses come at Unbound because the velocity of deals is a lot higher there.

In the satellite communications space, is Oneweb looking to venture into other virgin markets besides India?

The beauty of the satellite constellation is that it's a global network. We have 634 satellites that are circling the globe at any point in time, which means that we can provide connectivity in the UK, Africa, India, Europe, Asia and the US. OneWeb is speaking to all distribution and telecom partners in each one of these geographies to make sure that the telco operators can provide connectivity in the areas where it's hard to lay fiber.

When do you expect to start providing satcom services in India?

We are ready with the satellites and position. I certainly hope it will be this calendar.

What is one dream investment that you want to make?

The dream investment is always my next investment.

When you do these deals, whether it's Oneweb or BT, how much is Sunil Bharti Mittal involved?

He is our chairman. At the end of the day, the founder will always be involved. I've had the unique benefit of working with him very closely over the last six years…. The beauty of Oneweb was that it was co-led by both of us. Right from our meeting at 10 Downing Street, picking up the company from bankruptcy in 10 days, getting it out of bankruptcy three months later, and doing 16-17 satellite launches thereafter, it was a unique experience. It's the first time I learned his management style. He's very trusting and gives a lot of leeway to people like myself that manage the investments, and we go back to him for strategic direction if we need it.

Would you like to do business his way? Or is your management style different?

I have shamelessly tried to take the best aspects from anybody that I admire. He's definitely one of them.

Do you track Bharti group’s India business and would you want to run Airtel in India at any point?

All three of us, my sister, my brother, and myself, we're all shareholders of the business and there’s no shying away from that. We try to keep up to date with the evolution of any one of our Bharti businesses, whether it's Airtel, insurance, agriculture, OneWeb or Airtel Africa, whose boards I sit on. Our main objective right now is to ensure that we understand the different businesses, their challenges, where we're headed in the next five to ten years, and make sure we're good custodians.

…Our job is to support the professional management to make sure there's great alignment between the shareholder and the management… We are involved at the strategic level.
 

Post Brexit, there was a lot of talk about businesses shying away from the British market but Bharti has invested there. Are you looking more towards the European market, or are you here to stay in the UK?

We value businesses all over. The beauty of being in London is that you're neutral geographically. So it's easy to track businesses around the United States, Europe, and across the globe.