Govt approves Warburg Pincus’ $350 mn FDI investment in Bharti Airtel’s DTH arm

The government has approved Warburg Pincus’ $350 million foreign direct investment (FDI) investment in Bharti Airtel direct to home (DTH) arm Bharti Telemedia.

According to a PTI report, a source privy to the development said that the FDI approval has been received for the deal. In December 2017, Bharti Airtel had agreed to sell 20% equity stake in Bharti Telemedia to Warburg Pincus for approximately $350 million.

As per the deal, Bharti Airtel will sell its 15% in the DTH arm while the balance 5% will be sold by another Bharti entity.

In March, the Bharti Airtel board had approved the transfer of 19% equity share in Bharti Telemedia to a subsidiary company Nettle Infrastructure Investments. A part of the stake will be utilised for the completion of stake sale in Bharti Telemedia to Warburg Pincus Group.

In January, the company had decided to transfer 25% equity shares in Bharti Telemedia to its wholly owned subsidiary Nettle Infrastructure Investments. The company had also said that the stake transfer to Nettle does not include equity to be sold to private equity firm Warburg Pincus.

Bharti Telemedia’s net profit for FY18 had more than doubled to Rs 282.9 crore compared to Rs 131.5 crore in the previous fiscal. The company provides service under the brand Airtel Digital TV.

The company’s EBITDA was up 16% at Rs 1422.6 crore compared to Rs 1221.9 crore in the previous fiscal. EBITDA margin was 37.9% compared to 35.6%.

Revenue jumped 10% to Rs 3757 crore as against Rs 3430.6 crore. The company’s subscription revenue jumped 11% to Rs 3575 crore compared to Rs 3232 crore a year ago. Activation revenue was up 8.31% at Rs 182 crore compared to Rs 198.5 crore.

Expenses increased to Rs 2338.8 crore as against Rs 2214 crore. Content costs rose to Rs 1336.1 crore compared to Rs 1203.7 crore. Licence fee was up at Rs 377.9 crore compared to Rs 344.2 crore.