Airtel’s proposed rights issue credit positive: Moody’s

Moody’s Investors Service said on Tuesday that Bharti Airtel’s proposed fundraising of Rs 32,000 crore through rights issue and perpetual bonds is credit positive but its ratings are unlikely to change in near term as leverage is expected to remain elevated.

Last month, Moody’s had downgraded Airtel from Baa3 to junk Ba1, the lowest investment-grade, after placing its credit ratings of review for downgrade in November 2018. The downgrade meant that Airtel has to pay more if it chooses to raise funds overseas.

Airtel announced on February 28 about its proposed fundraising of up to `32,000 crore by way of a rights issuance of up to `25,000 crore and perpetual bond of up to `7,000 crore. Moody’s said the proposed rights issue, if completed, is credit positive for the company because it will allow it to reduce debt and improve liquidity.