Bharti Airtel sells 10% of Infratel to KKR, CPPIB at Rs 325 per share

A solar installation by Bharti Infratel

Bharti Airtel, India’s largest telecommunications services provider, said it sold 10.3% of its tower unit Bharti Infratel to funds advised by US private equity firm KKR and Canada Pension Plan Investment Board at Rs 325 per share.

The transaction has been done at a premium of around 3% to the stock’s opening price of Rs 315.00 on the NSE today.

With this, Bharti Airtel’s holding in Infratel falls to 61.7%.

KKR and CPPIB did not have any shares in the company before today’s transaction. This is the second time KKR has invested in Bharti Infratel. It sold its previous investment, acquired in 2008, two years ago.

The stake held by KKR and CPPIB will be the single largest public shareholder block.

The telecom company said it will use the total proceeds of Rs 6,193.9 cr to reduce its debt.

Airtel has tens of thousands of crores of debt, piled on as part of its efforts to boost its spectrum portfolio ahead of the data-driven expansion of services in India. The heavy investments, coupled with a decline in tariffs, have caused many analysts and investors to turn cautious on the sector.

Chairman Sunil Bharti Mittal said the investments were focused on the long term, and showed a “the positive outlook for the telecom infrastructure sector”.

Infratel, as a provider of towers and infrastructure, is expected to benefit from cut-throat competition in the space even if its parent bleeds. Among the tower company’s bigger clients is Reliance Jio Infocomm, the 4G services operator from the Reliance Industries group that has disrupted the telecom market with low tariffs.