Bharti Airtel considers raising $1 billion fund to settle spectrum dues

One of India’s biggest telco giants, Bharti Airtel, led by Sunil Bharti, is exploring new ways to raise funds amounting to up to $1 billion, or around Rs 8,330 crore.

This move is essential for the company to repay a vast amount of its remaining dues from as early as 2015. Reports suggest that this fundraiser could also include potential bond issues.

Bharti Airtel is expected to engage with large banks such as Barclays and Citi in late November 2023 to discuss a plan for fundraising and pricing.

The company has dues amounting to Rs 12,000 crore related to the purchase of the spectrum back in 2015. The company has been actively inquiring about efficient ways to raise funds.

This fundraising approach will help Bharti Airtel save on annual interest costs, strengthen its balance sheet, and boost cash flows in its quest to expand its 5G network across India.

Airtel could explore the possibility of utilizing a portion of the remaining funds from its rights issue to prepay a portion of the spectrum auction dues in 2015. Two years ago, the telecom company successfully raised Rs 5,247 crore in the initial tranche of its Rs 21,000 crore rights issue.

Bharti Airtel had bought 111.6 MHz of spectrum for Rs 29,130.2 crore. Out of that, Rs 7,832.6 crore was paid upfront and later paid in two more tranches of Rs 8,815 crore in March 2022 and Rs 8,025 crore in July 2023.

In October 2023, Bharti Airtel reported a 37 percent decline in net profit at Rs 1,341 crore for the quarter ending 30 September 2023. This was due to a one-time charge of Rs 1,570 crore. Bharti Airtel further reported a consolidated net profit of Rs 2,145 crore in the year-ago period. The company’s revenue rose by 7 percent to Rs 37,044 crore in Q2 FY24 as compared to Rs 34,527 crore in Q2 FY23.