Bharti Airtel Shares Fall Over 4% After Singtel Reportedly Offloads Stake Worth Rs 10,915 Crore
The shares of Bharti Airtel Ltd. fell 4.35% on Friday after Singtel reportedly offloaded stake worth Rs 10,195 crore (Singaporean $1.15 billion). Singtel likely sold 0.8% stake in the telecom giant, reported Bloomberg. This significant development has sparked concerns among investors about the company’s future prospects and its impact on the Indian telecom sector.
Singtel’s Stake in Bharti Airtel
Singtel directly owns 7.5% stake and indirectly (via Bharti Telecom) owns 20% taking the total ownership stands at 27.5%. The Singapore-based telecommunications giant holds Airtel shares through its subsidiary, Pastel Ltd. The company sold shares worth Rs 8,568 crore through block deal in May. The company had plans to sell approximately 4.76 crore shares, with the floor price for the block deal set at Rs 1,800 per share. JPMorgan, a multinational investment bank, was said to be the broker for this transaction.
Singtel’s Strategic Investment in Bharti Airtel
Singtel has been a strategic investor in India’s leading telecom provider since 2000. In 2022, Singtel divested a 3.3% stake for Rs 12,895 crore to Bharti Telecom, Airtel’s holding company. Additionally, last year, it sold a 0.8% stake for Rs 5,850 crore to Rajiv Jain’s GQG Partners. These transactions demonstrate Singtel’s ongoing efforts to rebalance its portfolio and maximize returns on its investments.
Impact on Bharti Airtel’s Share Price
The scrip fell as much as 4.35% to Rs 2,003.80 apiece after the earnings were announced. It pared losses to trade 4.02% lower at Rs 2,010.40 apiece, as of 10:39 a.m. This compares to a 0.56% decline in the NSE Nifty 50 Index. The relative strength index was at 61.80, indicating a moderate level of strength in the stock.
Analyst Ratings and Price Targets
Out of 32 analysts tracking the company, 25 maintain a ‘buy’ rating, two recommend a ‘hold,’ and five suggest ‘sell,’ according to Bloomberg data. The average 12-month consensus price target of Rs 2239.69 implies an upside of 11.3% from current levels. This suggests that analysts remain optimistic about Bharti Airtel’s long-term prospects, despite the short-term volatility caused by Singtel’s stake sale.
Conclusion
In conclusion, the recent stake sale by Singtel has sparked concerns among investors about Bharti Airtel’s future prospects. However, the company’s strong fundamentals and growth prospects remain intact. Investors should keep a close eye on the stock’s performance and market trends to make informed decisions. With the Indian telecom industry expected to continue growing, Bharti Airtel is well-positioned to benefit from this trend.