- Bharti Airtel Ltd has been approved by the telecommunications department to increase the company’s foreign direct investment (FDI) to 100 percent.
Bharti Airtel Ltd has been approved by the telecommunications department to increase the company’s foreign direct investment (FDI) to 100 percent, enabling the telecom operator to raise more capital if necessary.
The Indian Reserve Bank has already allowed overseas portfolio investors to invest as much as 74 percent in Bharti Airtel, the company said on Tuesday in a statement.
Approval by the Indian government will enable Singapore Telecommunications Ltd or Singtel, which owns a 35 percent stake in Bharti Airtel, to increase its stake in the Indian business.
The Indian telecom operator would also be allowed to raise more funds from other foreign investors.
The telecommunications department has approved Bharti Airtel Ltd to increase the foreign direct investment of the company to 100 percent, enabling the telecommunications operator to raise more capital if necessary.
The Indian Reserve Bank has already allowed investors from overseas portfolios to invest up to 74 percent in Bharti Airtel, the company said in a statement Tuesday.
The Indian government’s approval will allow Singapore Telecommunications Ltd or Singtel, which owns a 35 percent stake in Bharti Airtel, to expand its stake in the Indian business.
It would also help the Indian telecom operator to raise more funds from other foreign investors.
“This is a very positive move for Bharti Airtel, as it provides the company with more ways to collect capital. Singtel is already a major shareholder. Given that Airtel increased mobile tariffs last month, it is becoming even more attractive for Singtel to raise its shareholding and even for other investors to buy a stake in the company, “said a Mumbai-based analyst asking for anonymity. Bharti Airtel may need to raise more funds as the telecommunications department (DoT) is preparing to hold the first 5 G airwaves spectrum auction by April.
DoT is planning to put 8,300 megahertz of spectrum under the hammer at a reserve price of some 5.23 trillion. 6.050MHz of the 8.300MHz is allocated for 5 G services. India has already begun the process of holding 5 G trials.
Actually, 100 percent FDI is allowed in telecom, of which up to 49 percent can be invested in a business via the automatic path.
Beyond that, the inflow of overseas investment needs government approval.
Bharti Telecom is Bharti Airtel’s single largest shareholder with a stake of around 41 percent. In Bharti Telecom, Singtel owns 48 percent, giving it a 35 percent stake in Bharti Airtel.
In December, all telecommunications operators, including Bharti Airtel, increased mobile tariffs by up to 40%. Bharti Airtel also raised the monthly minimum recharge tariff for consumers to as high as 45 earlier this month, one year after setting the price at as high as 35.