Bharti Telecom Limited, the holding company under Bharti Enterprises has announced that it plans to raise Rs 11,150 crore by issuing non-convertible debentures (NCDs). The issuance, divided into six tranches, will be used to refinance high-cost debt and fuel strategic investments supporting the expansion of its subsidiary, Bharti Airtel, one of India's largest integrated telecommunications companies, Economic Times reported quoting people close to the development.
Bharti Telecom's debentures will have an annual coupon rate ranging between 8.25% and 8.90%, with maturity periods from three to ten years. The maturity for the first tranche is set for November 15, 2027, report said. The First tranche is expected to be released on Nov 5, 2024, according to a NDTV profit report.
Crisil Ratings has assigned an AA+ rating to Bharti Telecom's debentures, which indicates the market and analyst's confidence in the company's financial stability and repayment capacity. Barclays Bank and Standard Chartered Bank are the lead managers for this issuance, with anchor investments from major financial institutions such as JP Morgan, ICICI Prudential Mutual Fund, Nippon India Mutual Fund, SBI Mutual Fund, Kotak Mahindra Mutual Fund, Axis Mutual Fund, and Franklin Templeton Mutual Fund.
The company plans to use the funds raised from the issue to restructure Bharti Telecom's existing debt profile by refinancing high-cost liabilities. The company aims to reduce its annual interest payouts, lowering its overall borrowing costs.
The move will also strengthen Bharti Telecom's financial position and benefit Bharti Airtel, in which the former holds a major stake. Cutting down of its borrowing costs will help Bharti Telecom to fund the expansion activities of Airtel, including network enhancement, technology investments, and customer acquisition initiatives across India and Africa.
Bharti Telecom's Core Role within Bharti Enterprises
Incorporated in 1985, Bharti Telecom Limited serves as the primary holding entity for Bharti Airtel. The company's strategic investments have been instrumental in driving Bharti Airtel's growth, a leading telecom provider in India and several African markets.
Bharti Telecom's NCD issuance aligns with Bharti Airtel's long-term growth strategy, targeting market expansion, strengthening customer engagement, and invest in technology upgrades at a time the company is facing stiff competition from other telecom players like Jio.
