Singapore Telecommunications (Singtel) on Thursday sold 49 million shares, representing a 0.8% stake in Bharti Airtel for `5,850 crore to US investment firm GQG Partners.
After the transaction, Singtel will hold a stake of 29% in Airtel, which would be valued at around 33 billion Singaporean dollar, or Rs 2 trillion. Singtel’s market capital is only around S$39 billion.
“Airtel continues to see steady growth across all its businesses and has been rewarded with strong market valuations,” said Arthur Lang, CFO of Singtel Group.
“We believe there’s more room for growth, given India’s accelerated digital transformation and we intend to stay invested for the long term while working with Bharti Enterprises to equalise our effective stake in Airtel over time,” Lang added.
The transaction marks Singtel’s move to unlock value by recycling its assets, bringing the total capital recycled to S$8 billion (Rs 49,000 crore) since its strategic reset in 2021, Singtel said in a release.
With the transaction, Singtel is looking to fund the growth of its data centre and IT services as well as reduce net debt by S$3.2 billion (Rs 19,850 crore) as of end September 2023.
Shares of Bharti Airtel ended 0.8% higher at Rs 1,203.5 on the BSE on Thursday.
Singtel has been selling shares in Airtel for a while. In 2022, the telco sold a direct 3.3% stake for S$2.54 billion (Rs 15,000 crore)
The Group has also returned S$0.8 billion in special dividends to shareholders from capital recycling, contributing to cumulative dividends of S$5.2 billion (Rs 32,000 crore) paid out to shareholders since April 2022, it said.
Singtel recently raised its dividend policy to between 70% and 90% of underlying net profit. The company said it is looking at actions to improve total shareholder returns via sustainably growing dividends and share price appreciation.