Bharti Airtel's Rights Issue: Check Record Date, Key Details

The roughly 21,000 crore rights issue by telecom major Bharti Airtel will open on October 5, and the Sunil Mittal-led company has set September 28 as the record date for rights entitlement in the transaction.

Bharti Airtel is India's second-largest telecom company, with 35.2 million mobile subscribers. According to subscriber data recently issued by telecom regulator Telecom Regulatory Authority of India, it added 38.1 lakh, wireless subscribers, in June.

What is a rights issue?

Existing shareholders are offered the option to purchase a certain number of new shares in the firm they own in a rights issue. To entice investors to participate, these new shares are frequently offered at a discount to the existing stock price.

The funds gained through the selling of new shares could be used for a variety of things, including buying a competitor, investing in a new product, or paying down debt to shore up a shaky balance sheet.

Bharti Airtel Rights Issue Details

The rights shares will be sold for $535 per fully paid-up share, which includes a Rs 5 face value and a Rs 530 premium per share. For every 14 shares held on the record date, eligible investors will get one share. September 28 has been set as the record date for determining shareholders' eligibility to participate in the rights issue.

Last month, Airtel's board of directors approved a rights issue worth up to Rs 21,000 crore, with plans to expand its network and prepare for the launch of 5G services, at a price of Rs 535 per share, including a premium of Rs 230.

One equity share for every 14 shares held by eligible shareholders on the record date is the rights entitlement ratio. The payment terms for the issue price indicated that 25% would be paid upfront and the remainder would be called as needed over the next 36 months.

Airtel will undoubtedly get greater firepower as a result of the massive funding as it competes in the very competitive Indian telecom sector. Bharti Airtel's credit rating was recently maintained at "BBB-," with the outlook raised to stable from negative, signifying the company's better financial situation and ability to repay debt.

The company's promoters and promoter group will subscribe to the full extent of their aggregate right jointly. They will also subscribe to any shares in the Issue that are not fully subscribed. The promoters own around 55.8% of the corporation, while the general public owns 44.9%.