Bharti Airtel’s massive 21,000 crore rights issue will open to investors on October 5 and close on October 21, the company said in a regulatory filing on Wednesday. Telecommunications company Airtel is looking to raise funds to accelerate its investments, primarily in the mobile sector, as it seeks to expand its market share. The company also plans to use these funds to roll out 5G, fiber optics and scale up investments in data centers. The registration date for the rights issue has been set for September 28. Bharti Airtel had announced the issuance of rights of Rs 21,000 crore last month. Bharti Airtel stock is trading with gains today, hitting an intraday high of Rs 735 per share.
Bharti Airtel rights issue: everything you need to know
-Bharti Airtel’s board of directors on Wednesday approved the sale of up to 188.8.131.522 Rights Equity shares for an amount totaling up to Rs 20.987.39 crore.
– Investors can subscribe to the capital increase at a fixed price of Rs 535 each, a reduction of 37% from the current price of Bharti Airtel shares.
– At the time of the capital increase request, investors will only have to pay an amount of Rs 133.75 per share while the remaining Rs 401.25 will be collected in two separate installments.
-The company has decided on a rights attribution ratio of 1:14. Consequently, investors will be entitled to 1 right of right for every 14 shares of Bharti Airtel.
-The promoters of Bharti Airtel will also subscribe to the capital increase of the company and make an offer for any unsubscribed part of the issue.
-Similar to the rights issue of Reliance Industries, the shares issued to investors in the Bharti Airtel issue will be converted into partially paid-up shares and separately listed on the stock exchanges.
Right to rights
For investors who do not exercise their rights, these could be discharged into the waiver of rights window that normally opens for trading within a week of the registration date, said Abhilash Pagaria of Edelweiss Alternative Research in a note earlier. Subscription rights (SRs) are issued in a ratio similar to the issuance of rights to eligible investors. SEBI allows investors to exchange their RE for a price.
Earlier this year, Zerodha’s Nithin Kamath told The Bharat Express News Online that clients of the discount brokerage firm lost Rs 10 crore in expired rights by not asking for shares. The price of the RE is determined by the market based on the discount from the current market price of the security.
Evolution of the Airtel share price
Since Bharti Airtel announced its Rs 21,000 crore rights issue, the stock has jumped over 17% to now trade at Rs 735 per share, up from Rs 600 at the end of last month. Analysts reiterated positive calls for Bharti Airtel after the rights issue was announced. National research and brokerage firm ICICI Direct had advised investors to buy Bharti Airtel and also underwrite the company’s rights issue.