Why Bharti Telecom’s decision to retire debt is good news for Airtel investors

MUMBAI: “Let no debt remain outstanding,” says the Bible. Bharti Airtel Ltd’s promoters have decided to follow the principle by selling a small slice of their shareholding to retire the debt on their books.

Bharti Telecom Ltd, which holds 38.8% in Airtel, sold 152 million shares for about ₹8,500 crore in a block deal on Tuesday. Bharti Telecom had debt worth ₹8,500 crore on its books at the end of March which was taken to fund two stake purchases in November 2017 and May 2019.

The fact that the shares were sold at a time when the Airtel stock was at an all-time high is an added bonus. Airtel shares have risen sharply this month, after it reported a huge jump in average revenue per user (Arpu) and revenues for the March quarter. As pointed in this column, this resulted in massive market share gains vis-a-vis Reliance Jio Infocomm Ltd, whose Arpu grew only marginally.