Bharti Airtel announced it raised $2 billion through Qualified Institutional Placement (QIP) and $1 billion via Foreign Currency Convertible Bonds (FCCBs).
Airtel said the transaction is the largest dual tranche Equity and FCCB offering ever in the Asia Pacific region, the largest QIP by a private sector issuer ever in India and the largest FCCB offering from an India issuer in the last 12 years.
Airtel said it will use the funds raised to enhance its resources and strengthen the balance sheet, servicing and /or repayment of short term and long term debts, capital expenditures, statutory dues, long term working capital requirements and general corporate purposes.
Airtel raised $2 billion through the QIP route; which saw participation by reputed global and Indian investors. Airtel accordingly will issue 323,595,505 equity shares of face value of Rs 5 per equity share at a price of Rs 445 which implies a discount of 1.57 percent on the SEBI determined floor price of Rs 452.09 per equity share.
Post the QIP issue, the holding of promoter and promoter group will be 58.98 percent as against 62.70 percent.
The FCCB offering re-opened the Indian FCCB market after a 3-year absence of such issuances. The offering was multiple times oversubscribed with very strong demand from several marquee Asian and European funds. The deal was fully upsized to $1 billion and priced at the best-end of the yield for the company on the back of strong interest from existing and new investors. The FCCB was priced at a coupon of 1.5 percent per annum, yield-to-maturity of 2.0 percent per annum and a conversion premium of 20 percent above the final QIP price of Rs 445.
The transaction was anchored by several existing and new shareholders. Several of the large global long only funds, sovereign wealth funds, domestic mutual funds, multi-strategy funds and insurance companies participated in the offering. Long only investors comprised 80 percent of the demand for the QIP.
“Despite a volatile market environment and challenging global macro-economic conditions, the offering witnessed a strong response from the global and domestic investor community,” Harjeet Kohli, group director, Bharti Enterprises, said.