Bharti Airtel set to raise Rs 3,000 crore via CPs, Telecom News, ET Telecom

Bharti Airtel is set to raise Rs 3,000 crore via CPs

Mumbai | Kolkata: Bharti Airtel is set to raise up to Rs 3,000 crore in short-term debt from the local money market to make the first payment to the government for the 5G channels it bought in the recently concluded auction, three people aware of the matter said .

The telecom operator sells commercial papers (CPs) with maturities of up to 12 months, the people said. SBI Mutual Fund is said to have agreed to underwrite more than Rs 1,000 crore of Airtel’s debt and the country’s largest fund house is likely to opt for CPs maturing in February next year at 6.53%, they said.

The deadline for making the first installment of frequency payment is Wednesday.

Vodafone Idea is also in discussions with a group of public sector banks to raise around Rs 1,600-1,700 crore, a person familiar with the cash operator’s plans said, but he did not give details.

Airtel, SBI MF and Vodafone Idea did not respond to the request for comment till press time on Tuesday.

Sunil Mittal-led Airtel bought spectrum worth Rs 43,084 crore in India’s first 5G auction that ended earlier this month. If Airtel chooses to pay for 5G spectrum in 20 equal annual installments, its first installment will be Rs 3,848 crore to be paid to the Department of Telecommunications by August 17 (Wednesday), according to notices on the DoT’s website. It is widely expected that the airline will choose such a payment mechanism.

“Airtel is in talks with leading mutual funds and global and local banks as they have approached large institutions,” one of the people told ET.

The short-term loan is expected to be refinanced at maturity, the people said.

Barclays, Citi, BNP Paribas, State Bank of India and other major public and private banks have been approached by the telco. Barclays, BNP Paribas and Citi declined to comment, while SBI did not respond to ET’s queries.

Vodafone Idea, meanwhile, has to pay Rs 1,679 crore as the first installment.

Shares of Airtel closed 0.85% lower at Rs 703.80 on Tuesday on the BSE, while shares of Vodafone Idea ended 1.49% higher at Rs 8.84.

Airtel has announced plans to roll out 5G services using the non-standalone mode and is targeting a pan-India rollout by March 2024. The company’s CEO, Gopal Vittal, recently said that 5G coverage plans were ready for around 5,000 towns and cities.

Market leader Jio was the biggest spender in the latest 5G auction, buying radios worth Rs 88,078 crore, followed by Airtel and Vi, which spent Rs 18,799 crore.

“Airtel keeps raising funds across business purposes as money is fungible,” said another person.

A banker said the telco was pure credit as it had potential to grow.

India Ratings rated Airtel’s proposed CPs at A1+, a default rating. “Airtel’s spectrum footprint would be strengthened through the acquisition of the right to use the 5G frequency bands,” the rating firm said on July 27.


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