After falling over 2 per cent on Monday, Bharti Airtel extended losses on Tuesday with its share price plunging 3.53 per cent after Standard & Poor's kept rating of the telecom major unchanged
After falling over 2 per cent on Monday, Bharti Airtel extended losses on Tuesday with its share price plunging 3.53 per cent after Standard & Poor’s kept rating of the telecom major unchanged post the company’s plan to spend Rs 60,000 crore over the next three years. The rating agency anticipates that the investment will slow down the improvement in Bharti’s financial ratios.
The share price of the company closed at Rs 322.70, after touching an intraday high and low of Rs 336 and Rs 321.30.
The S&P said it expects the company’s ratio of funds from operations (FFO) to debt to consistently stay above its downgrade trigger of 20 per cent. “We estimate Bharti’s ratio of FFO to debt will reach 25 per cent in fiscal 2018, compared with our earlier expectation of 30 per cent from 21 per cent in fiscal 2015,” it agency said.
The revised capital expenditure and possible new spectrum acquisition, though discretionary, could result in Rs 15,000 crore of additional cash outflow compared with its earlier expectations
The agency further said it expects competition in India’s telecom sector to intensify over the next one to two years following the entry of Reliance Jio.
(With inputs from PTI)