Shares of Bharti Airtel climbed as much as 3.3 percent on Thursday to an intraday high of Rs 474.95 apiece on NSE after the company launched its Qualified Institutional Placement (QIP) worth $2 billion.
In a stock exchange filing on Wednesday, the telecom operator said that its board has approved the issue of equity shares on QIP of the face value of Rs 5 each as per SEBI regulations.
A special committee of directors for fundraising of the company has fixed a floor price of Rs 452.09 per share. The committee may, at its absolute discretion, offer a discount of not more than 5 percent on the floor price.
With the QIP of up to Rs 14,400 crore, the company will dilute 6.45 percent equity on full subscription, brokerage firm Kotak said in a note. Proceeds from the QIP will partly be used to meet the telco's Rs 35,586 crore dues to the Department of Telecom with regard to AGR (adjusted gross revenue) issue.
Bharti Airtel is required to pay the dues to the government by 24 January.
Morgan Stanley maintained an overweight stance on the stock with a target price of Rs 530 per share while Credit Suisse has maintained an "outperform" rating with a target price of Rs 550 per share.
Brokerages see that the intention of the QIP is primarily to pay AGR dues and that the company's 4G data subscriber growth remains strong.